Home prices have been on such a tear for the past several years that, in 34 metro areas across the country, the typical household lacks sufficient income to buy a house. That's right: Growth in home prices is outstripping income gains.

If you're trading up, it may not be too big of a problem. But for the 40 percent of buyers who are in the market for the first time, it's downright depressing.

So, what can you do if you're stressing over the down payment for your first home?

Tip 1: Fix your credit

Job No. 1 for anyone even thinking about getting into the market is fixing your credit. A score above 620 gets you into the game, but one above 700 will get you an attractive rate.

"It's critically important that people understand and know what their what their credit score is," said Bob Walters at Quicken Loans. "Even if you're not going to buy a home for a year or two, you need to talk to a mortgage banker you trust. They're going to pull what's called a tri-merged credit report."

Tip 2: Boost your savings

Save for your down payment by putting aside regular monthly amounts directly from you paycheck. You can arrange for money to flow into a short-term bond fund or a money market fund by contacting one of the big mutual fund families.

And shop around for decent returns because you will also have to pay closing costs equal to 3 to 5 percent of the home's value.

Tip 3: Think beyond the plain vanilla loan

You don't have to come up with a 20 percent down payment anymore; most loans for first-time buyers are made with just a 5 or 10 percent upfront payment. Some first-time buyers have even purchased their home with a 3 percent down payment.

Keep in mind that the less you put down upfront the higher your interest rate will be. And, you'll probably have to pay for private mortgage insurance (PMI). One way to avoid PMI is to take out two mortgages at the same time, sometimes called a piggyback loan.

Tip 4: Tap your IRA or 401(k)

A Roth IRA allows penalty and tax-free withdrawals for any reason. Just remember if you do take out money, you won't be able to replace it like you do with a 401(k). You can also borrow from a traditional IRA, but the withdrawal will be taxable.

Tip 5: Get help

If family or savings can't cover your down payment, consider a down payment assistance program. Each year, the Housing and Urban Development Dept. gives cities and states money to distribute to low and moderate income housing. You may qualify for a $3,000 to $5,000 grant.

If you're looking for a DAP, make sure anyone you deal with is a member of the Homeownership Alliance of Nonprofit Downpayment Providers. Some scam artists have posed as assistance programs to collect money.  

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