JONESBORO, Ark. (KreditSanta News) - A recent Zillow report has sparked debate among local realtors regarding the rising costs of mortgage down payments. According to Zillow, middle-class Americans need over $127,000 for a down payment to secure a monthly mortgage, based on current national averages and median household incomes.
Trenton Hoggard, a realtor with Century 21 Portfolio in Jonesboro, stated that while the national average home price is between $420,000 and $450,000, homes in Northeast Arkansas are much more affordable. “Our average is more like $255,000, so already we’ve just about cut that number in half,” Hoggard noted.
There are several assistance programs available for home buyers, including USDA, FHA, and VA loans, which can significantly reduce down payment costs.
USDA Loans: Zero Down Payment
USDA loans are designed for rural areas, which include towns like Bono, Bay, and Paragould outside Jonesboro. These loans allow buyers to purchase homes with no down payment. Lexi Hester, a first-time homeowner, utilized a USDA loan to buy her home in 2022. “We had a young baby, and I was pregnant with our second,” Hester shared, highlighting the program's impact on her family's home-buying journey.
FHA Loans: Minimal Down Payments
The Federal Housing Administration (FHA) offers loans with down payments as low as 3.5%, making home ownership more accessible. Hoggard explained that this brings the required down payment to just below $10,000 for an average-priced home in the area.
VA Loans: Benefits for Veterans
The VA loan program provides veterans, service members, and eligible surviving spouses with the opportunity to purchase homes with no down payment and low-interest rates.
Advice from the Experts
Hoggard cautions homebuyers against relying on Zillow for accurate information and recommends consulting with a local real estate agent instead. Both Hoggard and Hester encourage potential buyers not to be discouraged by the housing market, loan applications, or misleading information.
For more updates and expert advice on the housing market, stay tuned to KreditSanta News.