For buyers entering the housing market for the first time, the median household income isn't enough, according to a new RealEstate.com report.
The median income for a first-time buyer is $72,500, compared with the national median household income of $60,700. The difference in income for first-time buyers is more pronounced when compared with their peers who didn't buy, who have a median income of $42,500, according to the 2018 Zillow Group Report on Consumer Housing Trends.
Most buyers rely on savings to finance a down payment, but the second-highest source for a down payment comes from the proceeds from a previous home sale.
Buyers entering the market for the first time don't have this resource, though, so a higher income helps them set aside enough for a down payment.
First-time home buyers tend to put down slightly smaller down payments, with a median down payment of 14.5 percent of a home's price, rather than the traditional 20 percent down payment.
By comparison, 58 percent of repeat buyers put down at least 20 percent. With this smaller down payment, first-time buyers earning the median income could afford to buy a $338,000 home, meaning they could buy about 68 percent of available homes.
Learn more about how Travis Credit Union can help you with your home loan needs.
Visit traviscu.org/real-estate for more information.