Buying a home in your 30s or 40s can feel like a moving target. Prices climb, interest rates bounce around, and it is easy to wonder whether your savings are “enough.”

Comparing your numbers to national data can provide context—but the real power comes from using that insight to build a clear plan.

Where You Stand

A useful starting point is looking at typical cash balances by age. The Federal Reserve’s Survey of Consumer Finances tracks transaction accounts, which include checking, savings, money market deposit accounts, money market funds, brokerage call or cash accounts, and prepaid debit cards. These are the kinds of accounts many buyers tap for a down payment and closing costs.

For people under 35, the median balance in 2022 was about $5,400, while the average was roughly $20,540. Those between 35 and 44 had a median of around $7,500 and an average near $41,540. These figures highlight a big spread: some households have very little set aside, while others have significantly more.

Savings Benchmarks

Median numbers tell the story of the “middle” saver, while average values are pulled higher by people with much larger balances. If your savings are below the median, you are not alone—but you may need more time or a smaller home budget. If you are above the average, you are ahead of many peers.

Older groups generally hold more in cash. Households aged 45 to 54 had a median of around $8,700 and an average above $70,000. While this is encouraging, it also reminds buyers in their 30s and early 40s that expecting a large down payment early in life may be unrealistic without deliberate planning.

Down Payment Math

Now to the tricky part: housing costs. The National Association of Realtors has reported a median home price around $410,800 and a median down payment of 19% among buyers (10% for first-time buyers). On a median-priced purchase, a 19% down payment is roughly $78,000, while a 10% down payment is about $41,000.

That is just the starting point. Some low-down-payment options allow as little as about 3% down, which is still roughly $12,000 on a median-priced home. For many households under 65, that minimum alone can exceed their median transaction-account balance, before even considering closing costs.

Closing Cost Reality

Closing costs can add another 2% to 5% of the purchase price, depending on location, loan structure, and the specific fees involved. On a median-priced home, that can mean roughly $8,000 to $20,000 in additional cash needed at closing.

This mismatch explains why so many buyers in their 30s and 40s feel squeezed. Their savings may be growing, but prices and fees climbed faster. Rather than seeing this as a reason to give up, treat it as confirmation that buying a home in this environment requires strategy, patience, and possibly some creative help.

High-Yield Accounts

Automating monthly transfers into a dedicated “home fund” turns saving from a vague intention into a habit. Treating the contribution like a non-negotiable bill—paid right after payday—reduces the temptation to spend that money elsewhere.

Carl Richards, a financial planner and author, writes, “You do what you can, and then relax.” In homebuying terms, that means focusing on the pieces you control: savings rate, price range, and timeline.

Automating monthly transfers into this dedicated account turns saving from a vague intention into a habit. Treating the contribution like a non-negotiable bill—paid right after payday—reduces the temptation to spend that money elsewhere. When raises or bonuses arrive, directing a portion straight into this account can speed up progress.

Targeted Debt Paydown

Debt can quietly sabotage your homebuying plans in two ways: by consuming cash flow that could be saved and by making it harder to qualify for a mortgage. Prioritizing high-interest obligations, such as certain credit cards or personal loans, often gives the most benefit per dollar.

A structured plan—like the avalanche method, where you pay off the highest interest rate first—can reduce total interest over time. As balances fall, redirecting the freed-up payment amounts into your down payment fund strengthens your savings without increasing your overall monthly outlay.

Down Payment Help

Many buyers are surprised to learn how many programs exist to help bridge the gap. Local governments, housing agencies, employers, and nonprofit organizations may offer grants, forgivable loans, or low-interest second loans to cover some or all of a down payment or closing costs.

Eligibility often depends on income, location, or first-time buyer status. The application process can feel paperwork-heavy, but when successful, these programs can shave years off your savings timeline. Researching options in your area and attending first-time buyer workshops can uncover support you did not know existed.

Using Retirement Funds

Tapping retirement accounts for a home purchase can be tempting, and sometimes it is a reasonable part of a broader strategy. For qualifying first-time buyers, tax rules allow up to $10,000 from an individual retirement account to be used for a first home purchase without the usual early-distribution penalty.

Some workplace plans also let you borrow from your own balance. A 401(k) loan, when available, is repaid through payroll deductions, with interest flowing back to your account rather than to a lender. Another option is withdrawing contributions (but not earnings) from a Roth individual retirement account.

Retirement Trade-Offs

Despite these possibilities, drawing from retirement savings carries trade-offs. Money taken out loses the opportunity to grow over decades, potentially shrinking future nest eggs. If a workplace loan is not repaid on time—for instance, after a job change—it may be treated as a taxable distribution.

This does not mean retirement savings are off-limits in every situation. Instead, they should be considered carefully and usually only after exhausting other options, such as increased saving rates, down payment assistance, or adjusting the target home price. A conversation with a financial professional can help weigh the long-term impact.

Refining Expectations

One of the most powerful levers buyers control is their own expectations. Choosing a less expensive neighborhood, a smaller property, or an older home in need of cosmetic updates can dramatically reduce the required down payment and closing costs. These choices may bring homeownership within reach years sooner.

In some cases, renting a bit longer while aggressively saving and paying down debt may be the better path. In others, taking advantage of assistance programs and being flexible about location or style may be enough to move forward now. The “right” answer depends on income stability, lifestyle, and future goals.

Conclusion

Comparing your savings to national averages can be eye-opening, but it is only the first step. What truly matters is using that insight to build a plan you can execute: increase your savings rate, reduce costly debt, explore assistance options, and align your target price with your timeline. A small, consistent monthly action—automated and protected—often does more than a perfect plan you never start.