The median down payment in the U.S. last quarter was $26,000, an average of 13.6% down, according to a new down payment trends report from Realtor.com, published this morning. 

The analysis of down payment trends at the national, state and top-100 metro levels found that while down payments fell from the all-time-high in Q3 2023, down payments climbed annually – up 3 percentage points and roughly $12,000 from Q1 2023 – as homeshoppers contended with higher mortgage rates and home prices and a restricted home supply.

Despite the drop from the historical peak, down payments remain well above pre-pandemic levels –  larger percent down on today’s typically higher priced homes means buyers paid 87.8% more as a down payment in Q1 2024 ($26,400) compared to Q1 2020 ($14,000). 

Here are the key takeaways: 

• In Q1 2024, down payments reached an average 13.6% down, or $26,000, the highest first quarter average on record. 
  • Down payments fell from their Q3 2023 peak of 14.7% or $30,400. 
  • Down payment grew annually 0.6 percentage points, or $2,300, from Q1 2023. 
• The typical down payment as a dollar amount increased in all but 8 states. 
• In Q1 2024, the top 7 metro areas where buyers made the largest down payments were all expensive California markets. These pricey metros tend to see large down payments as both interest rates and interest payments increase with larger loan amounts, incentivizing buyers to put down as much as possible to avoid these costs. Also, these high-priced locales tend to have wealthier, high-earning residents who have the funds to put more down on a home.
• Three of the five metros with the fast growing down payments, as a percentage of purchase price, were also in California and included Oxnard-Thousand Oaks-Ventura, Calif., Modesto, Calif, and Stockton, Calif along with New Haven-Milford, Conn. and Springfield, Mo.
• Measured in dollars, down payments for investment and second homes were three and four times larger than for primary homes, in Q1 2024.

According to Realtor.com Sr. Economic Research Analyst Hannah Jones: “Despite a slight decrease from their peak, current buyers are still shelling out higher down payments compared to pre-pandemic norms. This trend may stem from intense local competition from a lack of homes for sale, compelling some to increase down payments to win the home, while others aim to lower their monthly payments by putting more down and taking out a smaller loan.”

According to Realtor.com Chief Economist Danielle Hale: “The current housing market's overall unaffordability has an impact on who is buying homes right now. Given persistently high home prices and elevated mortgage rates, many of today’s purchasers are likely either high-earners or repeat buyers leveraging existing home equity to use as a down payment, and this may explain why down payments have dipped but remained relatively high.”

You can read the full report here. If you're interested, I would be happy to coordinate an interview. 

In my Anticipatory Leader Program, I talk about being Anticipatory in how you approach your business future, identifying disruption before it has the opportunity to disrupt. However, an Anticipatory Mindset is a key strategic tool that can be applied to all areas of life, including the conversations we have both at work and in our personal lives.

I recently had the benefit of speaking with Phil Jones, who is a leading expert on the power of language for influence and persuasion. We discussed the art of structuring conversations and word choices. This is to promote safe spaces where information can be shared with trust and, in turn, innovation can thrive. In fact, Phil and I had such a great conversation, I am able to write even more about what we discussed in yet another article!

My first article was about eliminating friction and creating a gray space of curiosity to facilitate more efficient decision making, which you can read here. In this article, we will dive deep into actionable ways that business leaders can use anticipation to have more effective conversations that lead to productive results.

Anticipating the Conversation

The worst time to think about what you are going to say is the moment when you are saying it. On many occasions, we come away from conversations thinking, “I could have said this” or “I should have said that.” These hindsight comments often leave us believing that adjusting our words would have portrayed an idea better. This way of thinking doesn’t help us because the conversation or presentation is already over.

The conversation has already not gone the way you wished, but what if instead of wishing things went differently, we took the time prior to the conversation to look to the future on what the conversation could be? What if we anticipated any opposition in a conversation and prepared for it?

Your conversations can be exponentially more effective with anticipation! As I teach in my Anticipatory Organization® Model, the future is not an enigma. There are signs that point to the known future, and there are signs that point to how conversations will play out, especially if you use language strategically to drive the conversation in a beneficial direction.

Much like using Hard Trends and Soft Trends to help anticipate the future, using strategic language is a skill that takes time to master. It requires consistent practice and constant refinement in pre-solving problems any given conversation could have. Words are a tool used to help you get a desired result, and similar to every tool, you have to dial it in to use it.

A Formula for Conversational Success

During our conversation, Phil and I discussed a formula for taking any conversation to the next level. He identified six categories of principles outlined in his bestselling book Exactly What to Say: The Magic Words for Influence and Impact that any leader can use to enhance their skills, and I will outline them briefly below:

1. Rejection-Free Opening

A rejection-free opening is a way to get the ball rolling and to get someone to consider an idea by positioning yourself beside it. Use the phrase, “I’m not sure this is for you, but . . .” The first part of the phrase lights up their subconscious brain by piquing their curiosity. The “but” shifts their focus to what you really think.

Example: I’m not sure it’s for you, but there is an opening within our leadership team.

2. Perspective Change

You cannot change someone’s mind on a subject, but you can change how they perceive it. A perspective change involves words that nudge others in a new direction so they begin to look at something a different way. Giving an individual multiple reasons to view something differently is key.

Example: What is your experience with project management and streamlining operations?

3. Assumption Frame

An assumption frame is a tool that allows you to streamline decision making by giving an individual three options to choose from. The first option should be the hard choice, the second should be something they do not want, and the third should be what you want them to choose. By giving someone options, you empower them to feel that they are making their own decision.

Example: We have three options. One, I could take the lead, but I believe your unique skill set is precisely what we need for this project. Alternatively, we could have someone else manage the project, but it might lack the innovative touch and efficiency you bring to our team. Of course, considering your exceptional experience, leading the upcoming project could be a fulfilling opportunity for you.

4. Labeling

A label is a phrase that helps us to quickly accept something that is true. A caveat to this is that the label must be used with integrity and followed by something that actually is true to build trust.

Example: Don’t worry, your skill on this past project proves you are competent.

5. Staying in the Game

This principle involves words that help keep the conversation going when it might have ended otherwise. When objections arise, indecisiveness takes over, or you hear the dreaded “I’ll get back to you on that,” implement the following example:

Example: Help me to understand what it would take for you to be confident in this role.

6. Making Conversations Count

The last principle in Phil’s formula is to make the most of the conversation by inserting “just one more thing.” You can ask for referrals or get a review, but the best use of this principle is to ask a question to get more information that you can use down the road.

Example: Just one more thing. What are the three things you look forward to or are concerned about in this position?

Turn This System into a Template for Effective Communication

We all have desktop files and online templates that make repetitive work easier to navigate, but these documents must be customized to align with each situation. Why shouldn’t the conversations we have in our work and personal lives follow the same structure? Why shouldn’t we have a template that helps us to be more strategic in how we speak?

We should, and you can!

Words are a vehicle that we use to get our points across and create more efficient conversations that lead to streamlined decisions. Learn to fine-tune your words, implement anticipation in this process, and experience the results for yourself! Join my Anticipatory Leader Membership to access the episode and master the art of anticipatory thinking.