The Down Payment Myth: You Don’t Need 20% (And Here’s Why That’s Great News)

Homebuyers—let’s have a quick heart-to-heart.
You’ve probably heard the same line over and over: “You need 20% down to buy a house.” And if you're saving and saving and still feel like you’re not even close, I’m here to tell you… that’s a myth. A big one.

Wait… I Don’t Need 20%?

Nope. Unless your loan type or lender specifically requires it, 20% down is not the rule—it’s more like a suggestion if you’re trying to avoid mortgage insurance. But you can absolutely buy a home with a much smaller down payment. Sometimes even 0% down if you qualify for certain programs.

And I get it—this is fantastic news if you’re starting over, especially after a major life change like a divorce or transition to single parenthood. You’ve got enough on your plate. You don’t need outdated information making things harder.

So What’s “Normal,” Then?

According to the National Association of Realtors, the median down payment hasn’t been over 20% since 2005. Most buyers—especially first-time buyers—go with far less. Why? Because getting into a home sooner often makes more sense than waiting years to hit an arbitrary savings goal.

Let’s Talk Timing 🕒

Here’s the thing: Experts are predicting that home prices will continue to rise over the next five years. That means if you wait until you’ve saved 20%, your future home will likely cost more anyway. So you might be saving... while losing buying power. Oof.

Bottom Line?

You’re probably a lot closer to owning a home than you think. And that makes this a perfect time to explore your options—not next year, not “someday.” Today.

Not sure where to start? That’s where I come in. Let’s talk strategy, loan types, and the current market in San Luis Obispo County. I’ll help you make sense of your next steps and get you moving forward—confidently.

You don’t need perfect. You just need a plan.
– Amber Johnson, Pillar Real Estate