How to Save for a House Down Payment: The Realistic Plan
A 20% down payment on a $350,000 home is $70,000. Here is how to get there without a decade of sacrifice.
The median US home price is approximately $350,000 in 2026. A 20% down payment is $70,000 — which feels impossible until you break it into monthly targets. At $1,000/month saved: 5.8 years. At $1,500/month: 3.9 years. At $2,000/month: 2.9 years. A dual-income household saving $2,500/month reaches $70,000 in 2.3 years.
Do You Actually Need 20%?
No. FHA loans require 3.5% down ($12,250 on $350,000). Conventional loans allow as little as 3-5% ($10,500-17,500). VA loans require 0% down. The trade-off: smaller down payment means PMI (private mortgage insurance) of $100-300/month until you reach 20% equity, plus a higher monthly payment. But PMI is not wasted money — it is the cost of buying sooner, building equity now instead of waiting 5 more years to save 20%.
Where to Keep the Money
High-yield savings account (4-5% APY in 2026): best for 1-3 year timeline. Certificates of deposit: slightly higher rate if you know exactly when you will buy. Money market funds: similar to HYSA with potentially better rates. NOT the stock market — too volatile for a 1-5 year timeline. A 30% crash right before your purchase date could delay homeownership by 3-5 years.