The Reality Of Saving For a Home

11.30.07 | Money | 3 Comments | by junger

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This isn't meant to be a downer post, but it might come off that way.

Saving for a first home purchase is difficult. Entering the housing market has got to be one of the most arduous tasks out there.

Even though housing prices are continuing to decline, saving up enough money for a reasonable downpayment (not to mention closing costs, moving, etc.) is nearly impossible to do on your own.

And it's not like we aren't doing everything possible we can. We have automatic deposits from our checking account to our housing fund every month (a nice chunk of change), spend less than we earn, live frugally, and have recently even moved to an area with a cheaper cost of living.

I've always got work on the side going and I've been lucky to move up as quickly as I have in the working world.

But we're also saving for retirement (10% of my salary into a 401k, automatic deposits into two Roth IRAs) at the same time. Yes, this is good — we are young and getting started early, but at times, I look at the retirement money we've saved and thought, "Wow. We would have a nice downpayment if we used it."

We won't, don't worry. But it is tempting to consider.

We're doing everythi g we can, but the climb to enter the market seems so overwhelming. Even thinking about accumulating 20% for a downpayment — upwards of $100k where we are — is just impossible.

How do people enter the housing market with their own cash? I just don't get it.

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