It was 10 years ago that saving for a down payment took this long
Rising prices which have far outpaced income growth means a longer wait for first-time homebuyers.
A new Zillow analysis reveals that buying a typical US home on a median income would mean 7 years of saving 10% of income for a 20% down payment.
The last time it took that long to save for a down payment was in 2008, the peak of the housing bubble. And while home values have increased 98.6% over the past 20 years, incomes have grown by 52.5%.
The research found that 43% of buyers rely solely on savings to fund their down payment with other sources including family and friends helping out the other 57%.
Relying only on savings, it takes longest to save for a down payment in San Jose, Calif. Although the median household income is highest in San Jose ($118,061), it would take about 22 years of saving to come up with a 20% down payment for the median home, worth $1,287,600.
"Slower rent growth in recent months should create some more breathing space in renters' budgets, but rents remain high by historic standards. Even if you don't have plans to buy a home in the next year or two, it's not a bad idea to start setting aside savings for a future home purchase. It's also important to remember that there are many options for mortgages requiring less than 20% down."
|
Metropolitan Area |
Years to Save, |
Years to Save, |
Income Change, |
Home Value |
|
United States |
5.5 |
7.2 |
52.6% |
98.6% |
|
New York, NY |
7.2 |
11.4 |
57.4% |
147.9% |
|
Los Angeles-Long Beach-Anaheim, CA |
8.7 |
18.4 |
62.5% |
244.5% |
|
Chicago, IL |
5.7 |
6.4 |
43.4% |
60.8% |
|
Dallas-Fort Worth, TX |
5.4 |
6.8 |
50.4% |
90.2% |
|
Philadelphia, PA |
4.8 |
6.6 |
50.0% |
104.8% |
|
Houston, TX |
5.3 |
6.2 |
53.5% |
78.0% |
|
Washington, DC |
5.4 |
7.9 |
72.9% |
152.7% |
|
Miami-Fort Lauderdale, FL |
5.3 |
10.1 |
43.3% |
172.4% |
|
Atlanta, GA |
4.9 |
6.2 |
36.4% |
71.5% |
|
Boston, MA |
7.0 |
10.5 |
72.8% |
159.7% |
|
San Francisco, CA |
10.0 |
18.3 |
92.8% |
252.9% |
|
Detroit, MI |
4.9 |
5.3 |
25.2% |
34.0% |
|
Riverside, CA |
6.4 |
11.5 |
56.9% |
182.5% |
|
Phoenix, AZ |
5.8 |
8.2 |
48.8% |
111.7% |
|
Seattle, WA |
7.4 |
11.7 |
76.2% |
177.3% |
|
Minneapolis-St Paul, MN |
4.7 |
6.8 |
52.6% |
121.6% |
|
San Diego, CA |
8.6 |
15.4 |
76.9% |
217.4% |
|
St. Louis, MO |
4.5 |
5.1 |
47.8% |
69.5% |
|
Tampa, FL |
4.6 |
7.6 |
53.3% |
156.1% |
|
Baltimore, MD |
5.2 |
6.5 |
72.5% |
114.2% |
|
Denver, CO |
6.4 |
10.3 |
63.7% |
165.3% |
|
Pittsburgh, PA |
3.8 |
4.8 |
66.7% |
111.8% |
|
Portland, OR |
7.0 |
10.6 |
66.1% |
152.3% |
|
Charlotte, NC |
5.0 |
6.2 |
48.0% |
83.8% |
|
Sacramento, CA |
6.9 |
11.7 |
60.4% |
174.6% |
|
San Antonio, TX |
5.4 |
6.3 |
61.3% |
87.4% |
|
Orlando, FL |
5.1 |
8.2 |
40.0% |
128.0% |
|
Cincinnati, OH |
4.9 |
5.1 |
49.7% |
54.6% |
|
Cleveland, OH |
5.5 |
5.2 |
34.3% |
26.8% |
|
Kansas City, MO |
4.7 |
5.6 |
47.7% |
76.6% |
|
Las Vegas, NV |
6.2 |
9.2 |
35.8% |
100.8% |
|
Columbus, OH |
5.3 |
5.8 |
50.9% |
65.3% |
|
Indianapolis, IN |
5.5 |
5.1 |
37.6% |
28.5% |
|
San Jose, CA |
10.6 |
21.8 |
93.3% |
295.9% |
|
Austin, TX |
7.0 |
7.9 |
70.5% |
90.9% |
