To Afford the Typical Mortgage Payment, US Buyers Need a $127,000 Down Payment

As home prices continue to rise, the amount of money needed for a down payment is also increasing. According to real estate platform Zillow, a buyer making the median income needs to put down nearly $127,750, or 35.4%, to comfortably afford the monthly payment on a typical U.S. home. 

There are still some affordable U.S. cities, primarily in the Midwest, where a buyer can put less than 20% down. However, in more expensive markets, middle-income households need an even bigger down payment on top of the for-sale price. In Los Angeles, for instance, a median-income household would need an 81.1% down payment, or $780,203, to afford the typical home. In San Jose, Calif., the down payment needed is more than $1.3 million, or 80.9%. In many other expensive markets outside of California, the median-income household would still need to put down more than 60% as a down payment, including in Miami, Boston, and Seattle, where respective down payments of 64.5%, 61.7%, and 61.3% are needed. 

A median-income household in Seattle — making around $116,000 — would need about $462,000 to lower the debt enough to comfortably afford the monthly payment on the typical home, worth almost $753,500. It would take almost 24 years to build up that kind of savings if that household saved 10% of their income every month into a cash account earning a guaranteed 4% return. It’s a near impossibility without a gift from family, an inheritance or stock windfall, or a boost from down payment assistance. 

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