How Much A Down Payment For A California Home Will Really Cost You In 2025

Although the hottest real estate market in the US is no longer in California, it's still a very expensive state with a lot of competition. The significant financial burden of possibly becoming a homeowner continues to reflect that reality. According to the California Association of Realtors, the median home price in the state is around $909,400 in 2025, which means anyone wanting to buy a home needs to set aside a substantial amount as a down payment.

Typically, having a down payment of about 20% is ideal — anything lower than that amount will most likely require you to purchase mortgage insurance, which adds to the already pricey cost of the home buying process. That means for a median-priced home, the down payment would top $180,000. This amount is more than double the state's reported average salary of $89,945. For many first-time home buyers, coming up with such a huge lump sum can feel nearly impossible —especially if you're wanting to buy in the best neighborhoods of cities like Los Angeles and San Francisco. The median price of a home in these areas well exceeds the statewide median. 

To lessen this burden, California does offer assistance programs for residents who meet a certain income requirement, but these programs are very competitive and come with strict qualifications. And, while most conventional loans require only a 3% minimum down payment, putting down less than 20% usually means higher interest rates, additional fees, and a more rigorous lending process.

If you're interested in becoming a first-time homebuyer, it's crucial to educate yourself. The down payment is just one piece of the financial puzzle. As if it weren't overwhelming enough to have to come up with hundreds or thousands of dollars for a down payment, it's not the only upfront expense you'll have to face. You'll also need to consider closing costs, which is usually about 11% of the home's price in California. Closing costs include fees for your loan, real estate commission, escrow services, title insurance, and so much more. 

Then, you need to factor in your moving expenses, and once you've closed, here comes property taxes, homeowners insurance, and HOA fees. All of these elements can significantly increase your monthly housing budget. On top of all of this, for a competitive housing market like California, you may even need to show some good faith by putting down earnest money. Just to show the seller you're serious about going through with the purchase, you'll need to put forth $1,000 or even 1% to 3% of the home's purchase price just to make your offer stand out from the many others. Depending on the terms, if the sale doesn't go through, you could lose that money.

The bottom line is that even if you were to qualify for a low down payment, buying a home in California requires so much more than just that lump sum.