How to save money for a house: Practical tips for 2026

Owning a home is an exciting milestone—a chance to plant roots, build stability and grow within a community. But for many people, the biggest hurdle comes well before house hunting: saving enough money to buy a home with confidence.

In 2026, that challenge comes with added complexity. Per the National Association of Realtors 2026 forecast, mortgage rates are expected to remain elevated around the low-to-mid 6% range, and home prices are projected to continue rising modestly even as inventory improves, underscoring that affordability and preparation matter more than ever for prospective buyers.

Saving for a house typically involves more than just a down payment. It often includes closing costs, moving expenses and a financial cushion once you move in. Understanding how much to save, where to keep that money and how to build a realistic timeline can help turn homeownership from a distant idea into a reachable goal.

Before setting a savings goal, it’s important to understand where you’re starting. Taking a clear look at your income, savings and existing obligations can help you set realistic expectations and avoid unnecessary stress later.

Start by reviewing your existing savings, including money in savings accounts, emergency funds and other liquid assets. This gives you a baseline for building a home savings plan.

Many people find it helpful to open a separate savings account specifically for homebuying expenses. Keeping your house fund separate can make progress easier to track and reduce the temptation to dip into it for everyday spending.

See savings account options from Thrivent Bank

Your down payment depends on the price of the home and the type of mortgage you choose. While a 20% down payment can help you avoid private mortgage insurance (PMI), many buyers put down less.

According to the National Association of Realtors, the median down payment in 2025 was about 19% across all U.S. homebuyers. First-time buyers typically put down around 10%, while repeat buyers averaged closer to 23%—highlighting the savings required in today’s housing market.

A larger down payment can lower your monthly mortgage cost, but a smaller down payment may still make sense depending on your savings timeline and overall financial priorities.

Is it possible to buy a house with no money down? Find out

Homeownership assistance programs are available for those who meet certain requirements. This can make buying a home more affordable. Here are a few options to explore:

• Federal programs. The Federal Housing Administration, Veterans Administration and U.S. Department of Agriculture offer loans with low down payments or even no money down and flexible credit requirements to those who qualify.
• Low-income programs. You may qualify for the Housing Choice Voucher. The U.S. Department of Housing and Urban Development has a discount program exclusively to help police, firefighters and EMTs own homes in revitalized areas.
• State, county and city programs. Check with your state housing finance agency and other state and local home assistance programs. Many offer affordable rates and down payment deals for residents.

Saving for a house usually involves more than just the down payment. It’s important to plan for several additional costs, including:

• Closing costs, which are often 2% to 5% of the loan amount and may include appraisal fees, inspections, insurance, property taxes and legal expenses.
• Maintenance and repairs, which many homeowners estimate at 1% to 3% of the home’s value per year.
• Move-in expenses, such as furniture, repairs or upgrades.

Building an emergency fund alongside your home savings can help you transition into homeownership with more confidence and fewer surprises.

Once you understand your finances, the next step is turning that information into a clear savings target. This means estimating what kind of mortgage payment fits your budget and translating that into a realistic down payment goal.

Start by calculating your total monthly income and expenses. Consider your current savings and how much you can realistically set aside each month. Use budgeting apps or spreadsheets to track spending and identify areas to cut back to give you a clearer picture of what you can comfortably afford.

Next, consider your debt-to-income (DTI) ratio, a key metric lenders use to assess your mortgage eligibility. Ideally, aim for a DTI of 35% or lower, including your future mortgage payment. If it's higher, focus on reducing debt while building your savings.

A common guideline is to keep your monthly mortgage payment—including principal, interest, taxes and insurance—within 25% to 35% of your take-home pay.

Example: If your monthly take-home pay is $8,000, a mortgage payment between $2,000 and $2,800 may fit within that range.

This isn’t about how much a lender will approve you for. It’s about choosing a payment that allows room for everyday expenses, savings and unexpected costs.

Once you’ve identified a target home price, you can calculate your down payment goal based on different scenarios.

For a $450,000 home, that might look like:

• 5% down: $22,500
• 10% down: $45,000
• 20% down: $90,000

A higher down payment can reduce your monthly payment and eliminate PMI, but even a smaller amount can help you get started if it aligns with your broader financial plan.

Saving for a house works best when it fits into your everyday life. A thoughtful budget can help you make steady progress without sacrificing your current needs or long-term financial health.

Start by tracking your monthly spending. Separate fixed costs, like rent and utilities, from discretionary expenses, like eating out or shopping. This helps identify areas to reduce spending and redirect funds toward your house savings.

Using a clear budgeting framework can help you stay focused without feeling restricted. Consider one of these approaches:

• 50/30/20 budget: Divides your income into needs, wants and savings. If you’re saving for a house, trimming back on discretionary spending can free up more money for your home fund.
• Zero-based budgeting: Gives every dollar a job, helping you direct more of your income toward a specific goal, such as a down payment.

Explore other common budgeting methods

Setting a timeline can make your savings goal feel more tangible. Start with a target date, then work backward to estimate how much you need to save each month.

For example, if you want to save $20,000 in two years, you would need to set aside about $833 per month. If that number feels unrealistic, adjusting the timeline or target amount may be more sustainable than cutting essential expenses.

Your savings timeline can seem like a challenging road ahead. But there are many ways to trim your monthly spending, and those little changes add up in the long run. These budgeting tips can help you grow your home savings faster:

• Cut back where you can. Inflation means prices are higher, but sticking to a budget and living within your means is worth it. See if your service providers offer discounts on monthly bills. Any monthly savings can go toward your down payment.
• Consider a part-time job. If there's room for it, you could land a part-time job with an employer or join the gig economy as a freelancer. From ride-sharing to pet-walking, making extra cash can build your home savings faster.
• Save any extra money. Depositing regular cash windfalls, like an annual bonus or a tax refund, into your down payment savings can help speed up your progress.
• Manage your debt. Saving for a down payment while managing debt is possible. Reduce your debt burden and free up more cash by using the debt snowball or debt avalanche method. These strategies can help you pay off loans faster. Also, consider refinancing high-interest debts to a lower-interest loan. Transfer balances on high-interest credit cards to a lower-interest credit card or a card with a 0% APR promotion can also help.

Because house savings are often short- to mid-term, where you keep that money matters. Many buyers prioritize options that offer safety, liquidity and modest growth, rather than higher-risk investments.

Common places to save money for a house include:

• High-yield savings accounts, which offer easy access and competitive interest rates.
• Money market accounts, which may provide slightly higher yields with limited risk.
• Short-term CDs, which can offer higher interest if your timeline allows you to lock in funds for six to 12 months.

If your purchase timeline is approaching, keeping your savings in lower-risk, easily accessible accounts can help protect your progress from market volatility.

Reach your savings target as efficiently as possible by setting up an automatic deposit or transfer from your checking account to your interest-bearing savings account. Automating your contributions helps you stay on track and maximize your savings potential without extra effort.

If you’re planning to buy a home in 2026, understanding current market trends can influence your timeline and savings strategy.

According to recent forecasts, the housing market is gradually balancing:

• Mortgage rates are likely to stay above 6%, though slightly lower than during the peak of 2024–2025.
• Home prices are expected to rise modestly (around ~1%–2% nationally), rather than spike sharply.
• Inventory levels continue to improve, giving buyers a few more options than in recent tight-supply years.

These trends suggest a market with more choices but continued affordability challenges, especially for first-time buyers and those with limited savings. Focusing on consistent savings, flexible timelines and informed decision-making can help you stay prepared even as conditions shift.

• Rates above 6% don’t make buying impossible—but they do make preparation more important, especially for your down payment and emergency buffer.
• Modest price gains mean your savings timeline doesn’t have to race ahead of the market but staying consistent and strategic matters.
• Improving inventory can help you be more selective, which may reduce pressure to overshoot price targets.

If affordability feels tight, consider adjusting your timeline, savings targets or account types rather than stretching beyond what’s financially comfortable—that balance can pay off in long-term stability.

Saving for a house takes time, and plans may shift along the way. But with clear goals, consistent saving and an understanding of the true costs of homeownership, progress is possible.

If you’re unsure how buying a home fits into your broader financial picture, a conversation with a financial advisor can help you explore options and create a plan that reflects your priorities.