How Much Money Do You Need to Buy a House?

When you're deciding whether you're financially ready to buy a house, it's important to account for both the upfront costs of homebuying and the expenses you'll need to budget for after closing.

Saving up for initial costs like the down payment is pretty major, but you’ll need to brace your bank account for the bills you'll pay every month — plus unexpected expenses that, as a homeowner, are your responsibility.

If you're thinking about becoming a homeowner, here's a rundown of the costs of buying a house.

» MORE: How much house can you really afford?

According to the National Association of Realtors, the national median price for new homes was $384,800 in September 2022.

But housing prices vary across the U.S., and in some areas, you’re likely to pay more. The Federal Reserve Bank of St. Louis reports these median prices by region, as of September 2022:

• Northeast: $747,000.

• Midwest: $399,800.

• South: $426,100.

• West: $569,200.

Unless you’re paying cash, you won’t pay for your new house all at once. However, you’ll need some cash on hand when you close on the sale. Exactly how much is relative to the total purchase price of your home.

Down payment

Estimated cost: On average, 6%-7% of purchase price (for first-time buyers)

The down payment always looms large for folks considering buying a home. The good news? Though a 20% down payment would enable you to skip mortgage insurance — more on that below — putting 20% down isn't required. In 2021, the average down payment was 7% for first-time buyers and 17% for repeat buyers, reports the National Association of Realtors.

Depending on the type of home loan, your down payment could be as low as, well, nothing.

• Conventional loans can allow for down payments as low as 3%.

• FHA loans, which are backed by the Federal Housing Administration, can have down payments as low as 3.5%.

• VA loans, which are guaranteed by the U.S. Department of Veterans Affairs, allow service members and veterans to get home loans with 0% down.

• USDA loans, from the U.S. Department of Agriculture, let buyers in rural areas pay as little as 0% down.

Down payments can be a bit of a compromise, balancing what you can reasonably save with your desire to buy a home sooner rather than later. If you need a boost in the down payment department, explore local and state assistance programs.

» MORE: Ways to save for a down payment