Saving a down payment for a house is a big deal. According to an analysis by Zillow, a median-priced home in the U.S. now costs more than $192,000, which means that buyers have to come up with more than $38,000 to put 20 percent down. That translates into about two-thirds of the average household income. As indicated by CNN Money, that down payment figure fails to include the added expenditures associated with purchasing a home like inspections, closing costs and moving expenses.
The challenge of coming up with a down payment continues to expand as home prices rise across the country. In many markets, home prices are rising much more rapidly than incomes. It’s tougher in some communities than in others.
Homebuyers in California are among the most challenged. For those seeking to own a home in San Jose, San Francisco, or Los Angeles, saving a year’s worth of income wouldn’t cover a 20 percent down payment. These homebuyers will need to save at least 180 percent of the average income in those cities. On the other hand, buyers in Pittsburgh, Indianapolis and Kansas City only have to save 48 percent of the income for their down payment.