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The median existing-home price as of February 2025 is $398,400, according to the National Association of Realtors (NAR). And as of late 2024, first-time home buyers were paying a median 9% down, while repeat buyers were paying 23% down.

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That means the typical down payments are:

• First-time buyers: $35,856
• Repeat buyers: $91,632

It’s important to note that home values swing wildly from state to state. Homes in California have a much bigger sticker price than say, Alabama. Also, first-time buyers tend to purchase lower-cost homes than repeat buyers.

Regardless, saving up a down payment is no easy task. If buying a home is on your radar soon, it’s worth having a game plan for your savings.

How much should you really put down?

Ideally, home buyers should shoot for a 20% down payment. That way you’ll avoid private mortgage insurance (PMI) and have cheaper monthly payments.

But data shows the median down payment is only 9% among first-time buyers.

Here’s a breakdown of the most common loan types used by first-time buyers in 2024, and the minimum down payment required for each:

• Conventional loans: Minimum down payment is typically 3%. But, depending on your income and existing debts, lenders may bump this minimum up to 5%-10%.
• FHA loan: These loans require a 3.5% minimum down payment and are more flexible for lower credit scores. They are backed by the Federal Housing Administration (FHA).
• VA loan: These are only available to eligible veterans, active-duty service members, and some surviving spouses that meet specific requirements. VA loans offer 0% down and no PMI, making them one of the most affordable options — if you qualify.

How much you should put down is a personal choice. But don’t feel pressured to buy before you’re financially ready. It’s better to keep building up your savings than to stretch yourself too thin.

How to start saving for your down payment

Saving for a down payment takes discipline and smart financial choices. Here are some practical steps:

1. Open a high-yield savings account: Earn more interest and keep your down payment funds separate.
2. Automate savings: Set up automatic transfers to save consistently each month.
3. Use windfalls: Direct any bonuses, tax refunds, or other unexpected funds toward your savings goal.
4. Cut back non-essential expenses: Cut back on discretionary spending to increase savings.

Mortgage rates in 2025: What to expect

As of April 2025, the average 30-year fixed mortgage rate is 6.62%, per Freddie Mac. That’s slightly down from earlier in the year, giving buyers a bit more breathing room this spring.

Experts expect rates to hover between 6% and 7% through the rest of the year. So if you’re buying soon, it’s smart to shop around and lock in a rate when it dips.

The bottom line

Saving up $35,000 to $100,000 for a down payment is a daunting financial task. But with the right savings strategy and consistent habits, it’s totally possible.

If you’re serious about buying a home in 2025, get started by opening a high-yield savings account, and shopping around for a top mortgage lender.

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