How much did the average homebuyer put down? Not as much as you probably think in some areas

Mortgage activity plummets in the fourth quarter

Cash-strapped consumers concerned about the highest mortgage rates in two decades are holding off buying homes and creating “gloomy times” for lenders.

Mortgage companies approved 1.35 million loans nationwide during the fourth quarter, a 13.8% decline from the previous quarter – and off 16.5% from a year ago, according to ATTOM Data.

The Federal Reserve’s efforts to cool inflation – and, in turn, the economy – starting in spring 2022 has greatly slowed the housing market and the mortgage industry. Home loans have plummeted 68% from the peak in first-quarter 2021.

In California’s eight largest metro regions – from the Bay Area and Sacramento to San Diego – mortgage activity declined an average of 14.7%, or slightly more than the national rate. The Bay Area had the largest year-over-year drop.

“Multiple powerful forces continued to conspire against the mortgage industry during the fourth quarter, slicing back huge portions of their business,” says Rob Barber, CEO at ATTOM. “There were signs during the peak buying season of 2022 that things were starting to turn around, with increases in purchase, refinance and HELOC deals. That could happen again this year as we head into this year’s peak period, especially with interest rates coming down recently. But the fourth-quarter numbers revealed continued gloomy times for lenders, no matter how you sliced the pie.”


How gloomy? Well, mortgage companies approved 32,500 loans in Los Angeles (see table, below) during the fourth quarter, a more than 90% drop from the peak in third-quarter 2003, according to ATTOM.

Blame higher mortgage rates (and inflation, of course). Affordability, always a concern for wanna-be buyers in the state, has become an even higher hurdle with the 6%-plus mortgage rates. Only about one of every six households could afford to buy the median-priced home in California during the fourth quarter, the lowest level in almost two decades, according to the California Association of Realtors.

But there are, obviously, some buyers. Homes are selling, with some fetching multiple offers and entering escrow in a matter of a few days, according to multiple listing services throughout the state.

(Post continues after table)

Mortgages issued by metro region in Q4 2023

MetroNumber of mortgages issued% compared to a year ago
Los Angeles32,504-16.5%
San Diego10,541-16.3%
San Francisco12,565-22.4%
San Jose4,462-19.4%

Source: ATTOM Data


Now, the big down payments of previous quarters have slowed. The average California consumer who bought a home with a mortgage during the fourth quarter had a down payment of 16% – or $161,700. Many of those were move-up buyers who had tons of equity and could plunk down a ton.

In the state’s more affordable housing markets, where first-time buyers are a larger percentage of the transactions, the down payments are much smaller. 

In Bakersfield and Fresno, the average down payment was $14,100 (4.1%) and $28,000 (7%), respectively. In the Inland Empire (Riverside and San Bernardino counties), the entry-level market for many in Southern California, the average down payment for those with a mortgage was 9.8%, or $53,350.  

The average buyer in three metro regions – San Francisco, San Jose and Los Angeles – had down payments of at least 20%, the threshold where home lenders don’t require mortgage insurance, another cost for homeowners.

Median down payment and percent of the sales price in Q4 2023

MetroMedian down payment% of median sale priceLoan-to-value ratio
Los Angeles$196,00020.9%77%
San Diego$176,62517.9%80%
San Francisco$292,75024.4%70%
San Jose$432,57026.9%70%

Source: ATTOM Data

Homeowners are encouraged to negotiate with real estate agents and brokers. ADOBE STOCK

Go ahead and ask your agent for a commission discount. Good chance they will give in

A majority of Americans are aware real estate agents are compensated for advertising, showing and selling homes with a commission based on the sale price. 

But fewer than one of every three (31%) buyers or sellers have attempted to negotiate a lower commission with their real estate agent, according to a LendingTree survey. 

Some homebuyers and sellers are simply not aware that commissions are negotiable. It’s unclear whether that is the fault of the agents and brokers failing to disclose the information or those on the buying or selling end not carefully reviewing the contract. 

However, about two of every three (64%) who do ask for a discount in the commission are successful. 

“Like most things in life, you won’t know if your real estate agent will be willing to lower their commission fee until you ask,” says LendingTree senior economist Jacob Channel. “it can quite literally pay off.”


A 1% cut in commission – for example, from 6% to 5% – can save a home seller about $8,000, based on the median-priced home in California. 

In California, the average commission is 4.92%, the second lowest in the nation behind New Hampshire, according to Home Bay. So, clearly, many Caliornia home sellers are aware that commissions are negotiable. 

How much of a discount depends on numerous factors.

“Commission fees can vary significantly based on factors like who your agent is, what kind of home is being sold, where the home is being sold and how much the home is worth,” Channel says. 


In a fast-moving market where bidding wars and multiple offers are common, it’s easier to negotiate on commission. Many homes, especially if they are competitively priced, will be listed for several days or no longer than a couple of weeks before an offer (or offers) are on the table.

The current market is rather competitive since there are few homes available and just enough qualified buyers looking to purchase, despite the highest mortgage rates in 15 years.

It’s also worth noting that higher-priced homes – for example, two or three times the median home price ($1.5 million to $2.5 million) – have fewer buyers and often stay on the market much longer than lower-priced homes. They may be harder to sell and require a lot more work, but they also generate much larger paydays. So, homeowners of high-end homes should also consider negotiating.

There is one more reason why sellers are in the driver’s seat when negotiating commissions – with fewer homes, real estate agents and brokers have fewer opportunities to generate income.

Fremont, a Bay Area suburb with million-dollar homes and similar-priced views, is the happiest city in the U.S. SHUTTERSTOCK

Don’t worry, be happy. And many Californians are very happy

California is a challenging place to call home, from the lack of affordable housing to way-too-long commutes to work.

But many Californians, from the Bay Area to Southern California, are happy. Very happy.

Three of the five happiest cities nationwide are in the state – and seven of the top 20, according to WalletHub

Fremont, a Bay Area suburb, earned the top spot, followed by third-place San Jose and fifth-place Irvine.

WalletHub crunched data to rank more than 180 large and midsize cities based on three categories – emotional and physical well-being; income and employment; and community and environment. First-place Fremont finished in the top three for emotional and physical well-being and community and environment.

California’s happy place(s)
  • 1. Fremont
  • 3. San Jose
  • 5. Irvine
  • 7. San Francisco
  • 12. Huntington Beach
  • 14. Garden Grove
  • 15. San Diego
  • 24. Glendale
  • 25. Anaheim


Of course, big price gains generate huge grins. Almost two of every three homeowners in California – and a majority of those three “happy” cities – are considered equity rich, with more equity than mortgage debt. 

Homeowners who sold in those three cities, enjoyed a profit of anywhere from $330,000 to almost $700,000, according to ATTOM Data.

But the annual WalletHub survey includes a lot more than money. 

Overland Park, Kan., and Madison, Wis., finished in second and fourth place, respectively.

San Bernardino was the lowest-ranked city in California at No. 127.