When contemplating purchasing a home, a crucial initial step involves assessing your available liquid assets for a down payment, closing costs, and other associated expenditures. To gauge your preparedness, it's beneficial to understand the savings patterns of your peers, particularly those in their 30s and 40s.
The Federal Reserve's Survey of Consumer Finances provides valuable insights into the savings habits of Americans. As of 2022, individuals under 35 had a median transaction account balance of $5,400, with an average of $20,540. Those aged 35 to 44 showed a median of $7,500 and an average of $41,540. The 45-54 age bracket reported a median of $8,700 and an average of $71,180. These figures encompass various transaction accounts, such as savings, checking, money market, brokerage cash accounts, and prepaid debit cards, all presented in 2022 dollars.
Examining these savings figures against the backdrop of current housing costs reveals a significant challenge for many. The median sales price for a home in the U.S. reached $410,800 in the second quarter of 2025. With the average down payment standing at 14.4% as of the third quarter of 2025, a median-priced home would necessitate a down payment of approximately $59,000. Additionally, typical closing costs, ranging from 3% to 6% of the purchase price, would add another $12,320 to $24,650 to the total expense. Even the minimum 3% down payment for first-time homebuyers, which is over $12,000, surpasses the median transaction account savings for most individuals under 65, underscoring the financial hurdle many face.
For those aiming to strengthen their financial position for homeownership amidst rising prices and interest rates, several strategies can be employed. Utilizing high-yield savings accounts can accelerate savings growth due to better interest rates. Exploring down payment assistance programs offered by employers, local governments, or non-profit organizations can also provide crucial support. Furthermore, strategically managing and reducing existing debt can free up more capital for a down payment. While tapping into retirement savings, such as withdrawing up to $10,000 from an individual retirement account (IRA) for first-time homebuyers or borrowing from a 401(k), might seem appealing, it's essential to understand the potential long-term implications and drawbacks associated with such actions. Prudent financial planning and seeking expert advice are paramount in navigating the complexities of home buying, ensuring a stable and secure future.
