【CNBC】How much house can you afford? Here’s what first-time homebuyers need to know

The tight supply of homes on the market has pushed prices higher. In August, the median price of an existing home was $356,700, a 14.9% increase from August 2020, according to the National Association of Realtors.

That's left many first-time homebuyers on the sidelines. In August, they were responsible for just 29% of all sales. Historically, they make up 40% of all buyers.

In order to get into a home, some buyers are blowing their budget. In 2021, 28% purchased homes above their initial estimate, according to Zillow.

Yet creating a budget is very important before you decide to buy a home. Here’s what you need to know.

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