It’s no secret that raising the cash for a down payment is the toughest hurdle first-time buyers face on the road to home ownership.  For many, government programs like FHA, USDA Rural Development guaranteed loans, VA loans and down payment assistance programs sponsored by state and local housing authorities have made all the difference.

Yet requirements by lenders in the wake of the QM Rule and overall tighter loan-to-value ratio standards are taking their toll.  Average down payments are rising again, making it tougher for millennials who may face student loans and other financial hurdles.

Fewer first time home buyers are putting low down payments, according to the latest Realtor Confidence survey. About 60 percent of first time home buyers put down 6 percent or less compared to about 74 percent in 2009. Realtors reported that buyers who pay cash or put down large down payments generally win against those offering lower down payments.. For buyers with sufficient financial resources, a higher downpayment also means saving on mortgage insurance premium payments.

Down payments have already increased when last year, when the media for first-time buyers was 5 percent for first-time buyers and 14 percent for repeat buyers, according to NAR’s Profile of Home Buyers and Sellers.

Last year first-time buyers used a variety of resources for the loan downpayment: 78 percent tapped into savings; 27 percent received a gift from a friend or relative, usually from their parents; and 7 percent received a loan from a relative or friend. Nine percent sold stocks or bonds and 8 percent tapped into a 401(k) fund. Among entry-level buyers who said that saving for a downpayment was difficult, 54 percent said student loan expenses delayed savings.

As down payment requirements rise, the first-timer market share shrinks.  In March approximately 30 percent of Realtors reported a sale to a first time home buyer.  Typically, first time buyers account for about 40 percent of all homebuyers based on data from NAR’s Profile of Home Buyers and Sellers.