2020-10-13
Do You Have Enough Money Saved for a Down Payment?

One of the biggest misconceptions for first-time homebuyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20% down to buy a house. Here’s how it breaks down.

A recent survey by Point2Homes mentions that 74% of millennials (ages 25-40) say they’re interested in purchasing a home over the next 12 months. The study notes, “88% say they have significantly less savings than the average national down payment amount, which is $62,600.”

Thankfully, $62,600 is not the amount every buyer needs for a down payment in the United States. There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house.

According to the National Association of Realtors (NAR), “The median existing-home price for all housing types in August was $310,600.” (These are the latest numbers available). NAR also indicates that:

“In 2019, the median down payment was 12 percent for all buyers, six percent for first-time buyers, and 16 percent for repeat buyers.” (See graph below):

That means if a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636. That’s nowhere near $62,600.

Knowing there are also programs like FHA where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like USDA and loans for Veterans that waive down payment requirements.

The Point2Homes study also shares how much millennials have indicated they’ve saved for a down payment. As we can see in the graph below, 39% have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.

Unfortunately, the lack of knowledge about the homebuying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to contact a local real estate professional to understand the requirements in your local area if you want to buy a home. A trusted agent and your lender can guide you through the process.

Bottom Line

Be careful not to let big myths about homebuying keep you and your family out of the housing market. Let’s connect to discuss your options today.

 Subscribe to RSS Feed
Welcome to our Blog!
2020-10-22
Home Values Projected to Keep Rising

2020-10-20
Los estadounidenses están adquiriendo confianza en la economía

2020-10-16
Here are some mortgage refinancing options, even for people with bad credit

2020-10-15
Do You Need to Know More about Forbearance and Mortgage Relief Options?

2020-10-14
La razón #1 para no esperar para poner su casa en venta

2020-10-13
Do You Have Enough Money Saved for a Down Payment?

2020-10-08
A Homeowner’s Net Worth Is 40x Greater Than a Renter’s

2020-10-06
¿Es hora de mudarse a una casa de un solo piso?

2020-10-05
Why Pricing Your House Right Is Essential

2020-10-01
Why Selling this Fall May Be Your Best Move

2020-09-29
¿Hacia dónde se dirige el valor de las propiedades en los próximos 12 meses?

2020-09-29
Housing Market on Track to Beat Last Year’s Success

2020-09-23
The Cost of a Home Is Far More Important than the Price

2020-09-22
El costo de una casa es mucho mas importante que el precio

2020-09-22
Is the Economic Recovery Beating All Projections?

2020-09-14
Have You Ever Seen a Housing Market Like This?

2020-09-11
Homebuyer Traffic Is on the Rise

2020-09-07
Homebuyer Demand Is Far Above Last Year’s Pace

2020-09-02
No se trata solo del precio de la casa

2020-08-31
Why Is It so Important to Be Pre-Approved in the Homebuying Process?

2020-08-24
Sellers Are Returning to the Housing Market

2020-08-24
Los vendedores están regresando al mercado de la vivienda

2020-08-17
Las casas son mas asequibles en este momento de lo que han sido en años

2020-08-17
Homes Are More Affordable Right Now Than They Have Been in Years

2019-06-26
Having a Professional on Your Side Makes All the Difference!

Click here to see ALL articles.




Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.




Take us Along
All Home Listings in your Pocket!

What's Your Home Worth?
Find out where you stand in your market.

Google® Map Search
Use Google® Maps to find your next home.