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Published: Mar 21, 2024 9 min read

Purchasing a home is a lot more complicated than swapping cash for a set of keys — in addition to home inspection fees and an initial deposit, there’s a laundry list of costs homebuyers must pay before moving in.

Among the biggest? The down payment.

Generally, the more you can pay upfront, the lower your monthly mortgage bill will be. Most home loans require a minimum down payment of 3% of the sale price, but 20% is traditionally considered ideal by mortgage lenders.

Nowadays, that may be easier said than done. U.S. home prices have climbed to new heights since 2020’s pandemic-induced homebuying frenzy. The median down payment in the second quarter of 2023 was $31,500, according to a report from property data provider ATTOM, up about 19% from the previous quarter. Data from the Federal Reserve Bank of St. Louis put the median home sale price for the same quarter at $418,500.

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In a September housing affordability analysis, ATTOM noted that increases in home prices and mortgage rates have continued to push expenses beyond what many Americans earn, sidelining would-be homebuyers nationwide. In more than half of local real estate markets analyzed, homebuyers needed annual wages above $75,000 to afford the major costs associated with an average home.

“The dynamics influencing the U.S. housing market appear to continuously work against everyday Americans,” ATTOM CEO Rob Barber said in a news release.

Fortunately, there’s no shortage of programs that can help cover down payments.