By Shaina Mishkin

Coming up with a down payment for a first home is a high bar in places like New York and San Francisco. On top of sky-high prices, first-time home-buyers in these cities typically put down over 20%, far more than most cities, data from Rocket show.

First-time home buyers are back, May data from the National Association of Realtors found. The group's share of all home purchases rose to 35% in the most recent month, the highest level since June 2020.

Among the biggest hurtles for first-time buyers are down payments. Unlike repeat buyers, who can use the sale of their current home to fund a new purchase, first-timers have to build up a cushion of cash.

Just how big a cushion varies dramatically by location. A first-time buyer in Detroit can lock down a home by bringing $7,600 to the table, or about 5%, Rocket data show. In Miami, $42,745, or about 8% of a home's price tag, will do the trick.

But in pricey coastal cities, the median down payment alone balloons to six figures. A would-be buyer with $250,000 to spare can buy a big house entirely in cash in Cleveland — or cough up the median 22% first-time buyer down payment on a home in San Jose.

Saving for a down payment was among the most commonly cited hurdles to buying a home in the Realtor group's 2025 survey, with just under a third of first-time buyer respondents calling it the most difficult part of buying a home.

"The rapid escalation of home prices in recent years has made reaching a sizable down payment even more challenging," notes Keith Gumbinger, the vice president of mortgage website HSH.com.

For most first-time buyers, down payments above 20% aren't the norm. While the median repeat home-buyer in 2025 put 23% down in 2025, first-timers typically paid a more modest 10%, according to the National Association of Realtors' Profile of Home Buyers and Sellers.

A buyer purchasing with a loan backed by the Federal Housing Administration can put as little as 3.5% down, while other specialized loan options, such as those offered by the U.S. Department of Veterans Affairs, require no down payment.

Despite low down payment options, "there can be very good reasons to make a large down payment," says HSH's Gumbinger.

For example, putting more money down reduces monthly payments and, by extension, the income a buyer needs to qualify for a loan. Taking out a loan for 80% or less of a home's value also removes the requirement that homeowners pay for private mortgage insurance.

The quirks of regional housing markets play a part. In San Francisco's hot housing market, where Redfin data show the median home in May sold for about $1.8 million and roughly three in 10 sales were all-cash, a bigger down payment makes a buyer's offer stronger, notes Damon Knox, sales manager at the San Francisco-based City Real Estate.

With a median down payment of $400,000, or 27% of a home's purchase price, plenty of buyers are using cash from their stock portfolios to do so, notes Knox. "I don't think I've written an offer in the last two years that had less than 30 percent down," he says.

In New York City, the abundance of cooperative buildings, or co-ops, complicate the down payment picture, says New York-based Compass agent Brian K. Lewis.

The buyer of a co-op purchases ownership shares in the corporation that owns the building instead of actual property, StreetEasy, a New York City-focused real estate portal owned by Zillow, explains in a blog post.

Co-op purchases are governed by the rules of the board, which Compass's Lewis notes often stipulate large down payments. The minimum down payment "can be as little as 20% down in a co-op, and as much as a 100% down — no banks allowed," he says.

Some first-time buyers get help from family. In a group of 25 first-time buyers with mortgages, a little over three had help with their down payment from mom and dad, according to data from ICE Mortgage Technology.

The share of first-time buyers who got help from family with their down payment was higher before the Covid-19 pandemic, but ebbed when housing prices soared. That change "largely comes down to affordability," says Andy Walden, ICE's head of mortgage and housing market research.

"When homes were more affordable relative to incomes, a family contribution toward a down payment could be enough to get a buyer across the finish line," Walden explains. "As home prices rose relative to incomes and rates followed [...] a down payment contribution alone became less sufficient to solve the monthly payment challenge."

Whether May's return of first-time buyers was a blip or the start of a trend will become clearer next week: the National Association of Realtors will release its June data on Thursday.

If the share drops back down, May's reading could have been an anomaly or a transitory reaction to April's relatively brief drop in mortgage rates.

But the first-time buyer sales persist, it would be a welcome sign that economically sensitive buyers are finally returning to the housing market after years of high prices and mortgage rate increases pushed them to the sidelines.

Now if they can only afford that down payment.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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