Home prices are climbing so fast, your down payment will need to catch up.

Perusing the housing market? Better scoop up a property fast.

Waiting will only cost you more, according to Zillow. Potential San Jose homebuyers who wait until this time next year will spend $7,188 more on a down payment than if they were to buy today.

While San Jose residents would be paying the most compared to the rest of the nation, that doesn’t mean other major cities aren’t facing the same rising costs. Zillow says nationally, the median home cost will be up an extra $6,275 a year from now.

“In hot coastal markets like San Jose, home values are expected to rise as much as $35,934 by this time next year, the highest annual dollar increase of the metros analyzed,” Zillow says. “A buyer in 2018 will then need $7,188 more for a down payment on the median home than they would today.”

As more Americans are trying to save for a home, they’re running into major problems keeping up with the high costs of down payments. Renters aren’t buying homes because of how much they need to save for down payments, but they also can’t save because of skyrocketing monthly rent payments that are still rising.

“Sky-high rents and rising home prices are putting first-time buyers in a bit of a catch-22,” says Svenja Gudell, Zillow chief economist. “Buying now with a low down payment can be riskier. However, a renter who saves for another year to reach a larger down payment may find that the home they love today is outside their budget a year from now.”

San Jose residents will need to keep up by saving an extra $600 a month. There are other cities that are facing climbing costs for down payment savings, too. In Seattle, residents will need to stash away an extra $394 a month and in San Diego, it’s $267 monthly. It’s increasing all over the country, but in some cities, it’s a little more relieving on the wallet. St. Louis residents only need to save an extra $55 a month. In Cleveland, it’s $57.

Mortgage rates have been climbing all year. No matter who you are, you’ve had trouble buying a home this year due to rising home costs. As values continue to increase and demand outweighs supply, would-be buyers are finding it increasingly difficult to settle on an affordable home. Unfortunately, an uptick in home values and stagnant wages puts a lot of Americans in a bind — renters and homeowners alike. There are some places you can move for affordable homes, though, like Texas.

If you’re trying to stash away extra cash for a home, there are a few different ways to make sure you’re saving everything you can. For one, make sure you have a budget and are actually following it. Detail what you earn, what you spend, and what you save. When you get paid, put money into savings right away by paying yourself first, just like you would pay any other bill. You can still save while paying off your debt and other bills as long as you’re budgeting right. As long as you’re detailing where your money goes, you can eliminate unnecessary spending.

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Meet the Author

Dori Zinn

Dori Zinn

Writer

Zinn is a freelance journalist based in Fort Lauderdale, Florida.

Budgeting & Saving, Credit & Debt, Home

homebuyers, save money

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Article last modified on July 10, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Buying a Home a Year From Now Could Cost you an Extra $7,000 - AMP.