Mortgage Professional America
At a time when the median home price nationwide is over $400,000, the idea of having to save 20% of that amount could deter buyers from even considering purchasing a home. This is especially challenging due to the day-to-day affordability challenges that arise outside of the homebuying process. "It's very hard to save for that 20% down in many areas of this country when we know nationwide, the median home price is more than $400,000," said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors®. "But in some areas, we're talking about a million or even $2 million. Saving for 20% down would be completely out of reach for the typical American." The weight of frustration is even greater for first-time home buyers, who may not have had time to save a sizable down payment. The reality, according to the NAR survey, is that the average down payment for first-time home buyers was just 9%, less than half of the 20% they might think they need. "When we look at successful first-time home buyers, they're getting in with that typical down payment of 9%," she said. "So just knowing that data could make that potential home buyer say, 'Oh, maybe this is within reach to me,' as opposed to feeling deflated when you think about those outdated numbers."