It’s no secret that people are taking advantage of low mortgage rates and preparing to buy a home in the next year. For many, this raises the question: Do I have enough saved for a down payment?

Median Downpayment

Thirty-five percent of consumers believe they need 16-20% for a down payment, with 20% being somewhat of a ‘rule of thumb’ for years. Below, we look at median down payments for all buyers, first-time buyers, and repeat buyers, according to the National Association of Realtor’s 2020 Downpayment Expectations.

In 1989, the median downpayment was:

• 20% for all buyers

• 10% for first-time buyers

• 23% for repeat buyers

In 2019, the median downpayment was:

• 12% for all buyers

• 6% for first-time buyers

• 16% for repeat buyers. 

While 20% was a standard 30 years ago, that is no longer the case. 

What You Need to Save for a Downpayment Today

The national median existing-home price is $310,600. To put down 20%, you would need to have over $62,000 saved, in addition to closing costs. 

In a recent survey by Point2Homes, 47% of millennials surveyed said they had less than $10,000 saved for a downpayment, significantly less than 20% of the average price point. With rising student loans, child care expenses, and other debt, saving seems like a daunting task. 

Fortunately, buyers today don’t need to put 20% down. Some programs, including FHA, allow qualified first-time buyers to purchase a loan with a 3.5% down payment. Take a look at how much you need to save for a down payment for a $310,600 home, depending on your situation: 

What You Need for a Down Payment

For a $310,600 home

For a $310,600 property, this equates to:

• $10,871 for 3.5% down

• $18,636 for 6% down

• $37,272 for 12% down

• $49,696 for 16% down

If you are ready to buy a home, meet with your mortgage lender to determine what type of loan you can qualify for, and how much you need to have for a down payment. Once you have your finances in order, contact us to begin your search!