• A median-income household would need to put 35.4% down to afford the payments on a typical U.S. home. 
• A typical home is affordable to a median-income household with 20% down or less in 10 of the 50 biggest U.S. markets. 
• 43% of last year’s home buyers used a gift from family or friends to help with their down payment. 

Down payments have always been important, but in the current market, where interest rates remain high and volatile and home values are stable or rising, boosting the amount you put down can make the difference between a home that’s affordable and one that’s not.

A Zillow analysis of major U.S. metropolitan areas shows that a home buyer making the median income needs to put down nearly $127,750, or 35.4%, to comfortably afford a typical U.S. home. 

When we say comfortably afford a home, we mean the mortgage payment — principal and interest, plus property taxes and insurance — on the typical home takes up no more than 30% of the typical income in the area. That leaves enough of a budget buffer for emergencies and other important things. 

There are still affordable pockets of the U.S. In 10 major metros, the typical home is affordable to a median-income household with less than 20% down. Most are in the Midwest, where home values have largely grown at a strong clip in recent years. 

In several other major markets — places such Austin, Jacksonville, Charlotte, and Raleigh — a median-income household can still qualify for a conforming loan for the typical home with 20% down, assuming a qualifying credit score and no other debt. The relative affordability of these markets is a big reason why many of them were boom markets during the pandemic, and likely will be into the future. 

In more expensive markets, where home values have long outpaced incomes, middle-income households need an even bigger down payment share on top of the bigger price tag. In Los Angeles, a median-income household would need a nearly impossible 81.1% down payment ($780,203) to afford the typical home, highest in the country. In San Jose, the down payment needed is more than $1.3 million (80.9%) — that’s more than the typical home is worth in every other major market. Outside of California, median-income households would need to put more than 60% down in the New York City metro area (75.3%), Miami (64.5%), Boston (61.7%) and Seattle (61.3%). 

How long would it take to even save that up? 

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. 

In a more affordable market like Atlanta, a median-income household would need more than $118,000 saved for 30.5% down on the typical home in that market, currently valued at almost $387,500. That would take more than 10 years, using the same assumptions as the Seattle example. 

That’s heavy! And it helps explain why 43% of last year’s buyers used a gift or partnership from family or friends for at least part of their down payment, and also why more than half of millennial and Gen Z buyers view the opportunity to rent out a portion of their home for rental income as “very” or “extremely” important. Not to mention the strength of the single-family rental market. 

Home buying aspirations – that desire to shape our home front – is pretty powerful. This analysis illustrates the challenges a buyer needs to overcome, but one avenue that can help is down payment assistance. In Minneapolis, for example, the average amount of down payment assistance available across the metro is just under $22,750, according to data from Down Payment Resource. Receiving that amount would take a median-income buyer in Minneapolis from needing to save a 27% down payment to needing 21%.