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House prices have climbed so high that many Americans are losing hope of ever owning a home.
Heres the question: Is homeownership really out of reach for many Americans?
How much money do people need to be able to buy a typical U.S. home?
This article will discuss how much money prospective homeowners need to sock away before they buy their first house.
(Spoiler:its a six-digit figure.)
How Much Does the Typical US Home Cost?
Today, the median cost of a U.S. home is a whopping $412,000.
Just four years ago, the median price of an American home was $317,100.
Thats the biggest housing market increase in a while.
Typically, housing costs rise gradually but costs suddenly soared in 2020 and have yet to come back down.
How Much Should Down Payments Be?
However, the 20% figure is just a guideline.
Some homebuyers put down as little as 5% or even 3%.
And some homebuyers make a larger down payment, paying 30% or more of the homes value.
How Much Should Homebuyers Have To Comfortably Buy a Home?
Thats just a little over 35% of the cost of a median home.
How did Zillow arrive at this figure?
Homeowners need the rest of their income for other expenses, as well as for savings and emergencies.
The Northeast is themost expensive regionfor housing, with homes selling for a median price of $701,500.
Costs in the South and Midwest are much lower.
In the South, the median sale price of a home is $371,600.
The median sale price of a Midwestern home is $372,500.
However, would-be homebuyers in high-cost areas will need to save upeven more moneyfor their down payments.
How Can Americans Afford To Buy Homes?
Homeownership costs can be discouraging.
But if your heart is set on buying your own home, its an achievable dream.
If your household income is below $100,000, there are still42 stateswhere you could afford homes.
Choosing the right location can make all the difference in the world.
The federal government also offers incentives and aid to first-time homebuyers, so its always worth applying.
If homeownership is truly your dream, then those little sacrifices are probably worth it!
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