Median Tri-Cities home down payments lowest in East TN

If you think the 20% down payment you read so much about is the norm – think again. And looking at the average down payment and the average loan amounts compared the other metro areas in East Tennessee, and the nation is a pretty good snapshot of just how housing markets vary.

During Q4 last year the median down payment in the three-county Johnson City Metropolitan Statistical Area (MSA) was 3.1%. And in the four-county Kingsport-Bristol MSA, it was 2.4%.

Those numbers come from ATTOM Data Solutions Q4 down payment report.

The Tri-Cities median down payment is low when compared to the Knoxville (5.4%) and Chattanooga (5.2%) MSAs, which were low when compared to the national median (7.1%). The nation began this decade with medians in the 8% plus range, and they have declined ever since.

The reason the 20% downpayment is so ingrained in housing market and mortgage discussions is it’s the benchmark lenders would like to have. It’s also the private mortgage payment benchmark.

Brushing the percentages aside, here’s how the average payments stacked up during the last three months of last year:

Johnson City MSA – $20,333

Kingsport-Bristol – $18,333

Chattanooga MSA – $30,388

Knoxville MSA – $30,388

And here’s the average loan amounts:

Johnson City MSA – $156,428

Kingsport-Bristol – $135,992

Knoxville – $188,924

Chattanooga – $188,864

Nationwide the average down payment was $69,908, and the average loan amount was $280,889.

Down payments have and will likely continue to be at the top of the housing market watch list, and tight inventories continue squeezing sales and pushing prices higher. This is an especially sensitive issue for first-time buyers.

But since a large number of the sales are financed by the USDA and local credit unions, there are numerous down payment assistance programs available for buyers who shop. Eastern Eight is also a good source for housing assistance.

And the Tennessee Housing Development Agency continues its aggressive push into East Tennessee with programs and loan products designed to help first-time and low-income buyers. The agency has made big gains in Eastern Tennessee, and its director says that the agency will roll out a conventional mortgage product next year.