Saving for a down payment to buy a home isn't easy these days, but it can a little easier depending on where you live. RealEstate.com recently looked at the best places where first-time home buyers can save for a 20% down payment the fastest. See which cities are best for first-time homebuyers.
- Saving enough money for a down payment to buy a home isn't easy these days.
- In fact, 39% of millennial homebuyers find it difficult to save for a down payment, according to Zillow Group's Housing Trends Report.
- RealEstate.com found the places where first-time home buyers can save for a down payment the fastest based on average income and savings rates.
- There are only six cities where it takes the average person less than four years to save for a down payment.
Saving for a down payment can be tough, especially when it's your first home.
The price of housing has become so high that it can take nearly a decade to save for a 20% down payment on a house, according to a SmartAsset report released earlier this year. And 39% of millennial homebuyers find it difficult to save for a down payment, according to Zillow Group's Housing Trends Report.
But in some places it's easier to save for a down payment than others.
RealEstate.com recently took a look at the 35 biggest metro areas in the US to see where first-time homebuyers can save for a down payment the fastest. Analyzing data from the US Census Bureau and Bureau of Labor Statistics, they factored in the median household income among buyers aged 24 to 36, as well as the annual savings rates for renters, using data from the March 2018 Zillow Group Housing Aspirations Report.
Assuming the buyer was looking for an entry-level valued home, RealEstate.com determined how much money they would need to save for a 20% down payment for the median home value in that range — the standard, but not required, down payment to buy a home. More than one-third of millennial homebuyers put down 20%, according to the Zillow Group's Housing Trends Report.
They then calculated how long it would take the buyer to save for the down payment based on their income and annual savings rates. These calculations did not factor in any windfalls or gifts millennials received from family, though many do — one-third of millennials anticipate they'll receive family support for at least 30% of their down payment, revealed a study by Apartment List.
Turns out, first-time homebuyers can save for a down payment in less than four years in six cities, including Detroit and Chicago. In eight cities, including Atlanta and Boston, it can take them more than five years to save for a down payment.
Below, see the top 20 cities where first-time homebuyers can save for a down payment the fastest, ranked from longest time to shortest time.
20. Boston, Massachusetts
Annual income: $58,600
Annual savings: $12,557
Median home value: $394,300
20% down payment for median home: $78,860
Years to save for down payment: 6.28
19. Philadelphia, Pennsylvania
Annual income: $46,900
Annual savings: $5,862
Median home value: $174,200
20% down payment for median home: $34,840
Years to save for down payment: 5.94
18. Charlotte, North Carolina
Annual income: $42,800
Annual savings: $5,350
Median home value: $156,700
20% down payment for median home: $31,340
Years to save for down payment: 5.86
17. Houston, Texas
Annual income: $45,300
Annual savings: $5,662
Median home value: $165,600
20% down payment for median home: $33,120
Years to save for down payment: 5.85
16. San Antonio, Texas
Annual income: $41,800
Annual savings: $5,225
Median home value: $149,100
20% down payment for median home: $29,820
Years to save for down payment: 5.71
15. Atlanta, Georgia
Annual income: $46,200
Annual savings: $5,775
Median home value: $163,800
20% down payment for median home: $32,760
Years to save for down payment: 5.67
14. Columbus, Ohio
Annual income: $42,100
Annual savings: $5,262
Median home value: $147,300
20% down payment for median home: $29,460
Years to save for down payment: 5.6
13. New York, New York
Annual income: $63,900
Annual savings: $13,693
Median home value: $346,200
20% down payment for median home: $69,240
Years to save for down payment: 5.06
12. Cincinnati, Ohio
Annual income: $42,000
Annual savings: $5,250
Median home value: $130,500
20% down payment for median home: $26,100
Years to save for down payment: 4.97
11. Kansas City, Missouri
Annual income: $44,800
Annual savings: $5,600
Median home value: $136,700
20% down payment for median home: $27,340
Years to save for down payment: 4.88
10. Washington, DC
Annual income: $67,900
Annual savings: $14,550
Median home value: $343,000
20% down payment for median home: $68,600
Years to save for down payment: 4.71
9. Austin, Texas
Annual income: $50,700
Annual savings: $10,864
Median home value: $249,700
20% down payment for median home: $49,940
Years to save for down payment: 4.60
8. St. Louis, Missouri
Annual income: $43,200
Annual savings: $ 5,400
Median home value: $119,900
20% down payment for median home: $23,980
Years to save for down payment: 4.44
7. Cleveland, Ohio
Annual income: $42,900
Annual savings: $5,362
Median home value: $109,600
20% down payment for median home: $21,920
Years to save for down payment: 4.09
6. Pittsburgh, Pennsylvania
Annual income: $41,700
Annual savings: $5,212
Median home value: $103,600
20% down payment for median home: $20,720
Years to save for down payment: 3.98
5. Indianapolis, Indiana
Annual income: $39,400
Annual savings: $6,567
Median home value: $122,500
20% down payment for median home: $24,500
Years to save for down payment: 3.73
4. Baltimore, Maryland
Annual income: $54,300
Annual savings: $11,636
Median home value: $214,000
20% down payment for median home: $42,800
Years to save for down payment: 3.68
3. Detroit, Michigan
Annual income: $43,100
Annual savings: $5,388
Median home value: $96,700
20% down payment for median home: $19,340
Years to save for down payment: 3.59
2. Dallas, Texas
Annual income: $50,600
Annual savings: $10,843
Median home value: $185,400
20% down payment for median home: $37,080
Years to save for down payment: 3.42
1. Chicago, Illinois
Annual income: $50,500
Annual savings: $10,821
Median home value: $177,300
20% down payment for median home: $35,460
Years to save for down payment: 3.28