SEATTLE, Nov. 9, 2017 /PRNewswire/ -- For
future home buyers wondering when to stop saving and get into the
housing market, the math is clear: the sooner the better. With home
values forecasted to rise in every major U.S. metro over the next
year, a 20 percent down payment on the median-priced home today
will cost thousands of dollars more just one year from now.
Nationally, the median home will be worth $6,275 more a year from now, according to
Zillow®'s home value forecasts. That means the average
U.S. buyer will need to save an additional $105 a month – $1,260 total over the next year – just to account
for how much more a 20 percent down payment will cost a year from
now.
In hot coastal markets like San Jose, home values are expected
to rise as much as $35,934 by this
time next year, the highest annual dollar increase of the metros
analyzed. A buyer in 2018 will then need $7,188 more for a down payment on the median home
than they would today. For those saving on a monthly basis for a
future home purchase, that equates to putting away an additional
$599 a month just to keep up with
home value appreciation, let alone whatever else is needed for the
down payment itself. Future home buyers in Seattle, San
Diego and Riverside, Calif.
can also expect to spend thousands of dollars more on down payments
for the median home a year from now.
Saving for a down payment is one of the biggest hurdles to
homeownershipi. That may be why more than half (59
percent) of all first-time buyers today put less than 20 percent
down on their home purchase, according to Zillow Group's Consumer
Housing Trends Report 2017. However, a small down payment does not
come without risks. The report also found that buyers with larger
down payments are more likely to get their offer accepted,
averaging just 1.9 total offers before winning their house compared
to 2.4 for buyers with lower down payments. When time is money, a
low down payment can be costly.
"Sky-high rents and rising home prices are putting first-time
buyers in a bit of a catch-22," says Dr. Svenja Gudell, Zillow chief economist. "Buying
now with a low down payment can be riskier, and the offer may not
be considered as competitive by the seller. However, a renter who
saves for another year to reach a larger down payment may find that
the home they love today is outside their budget a year from now.
For those considering buying in the next year, getting into the
market today may make more financial sense than they think."
Buyers can use the Zillow affordability calculator to see how
much they can actually afford to spend on a home, based on their
income, debt and savings. The Zillow mortgage calculator can also
provide custom down payment estimates based on home price and
interest rates.
Metro
|
Median Home Value
(Sept. 2017)
|
20 Percent Down
Payment (Sept. 2017)
|
YoY Home Value
Forecast (%)
|
YoY Home Value
Forecast ($)
|
Median Home Value
(Sept. 2018)
|
20 Percent Down
Payment (Sept. 2018)
|
Avg. Monthly
Savings Needed to Keep up with Home Prices Over Next Year
|
United
States
|
$ 202,700
|
$ 40,540
|
3.1%
|
$ 6,275
|
$ 208,975
|
$ 41,795
|
$ 105
|
Los Angeles-Long
Beach-Anaheim, CA
|
$ 613,200
|
$ 122,640
|
1.2%
|
$ 7,495
|
$ 620,695
|
$ 124,139
|
$ 125
|
Chicago,
IL
|
$ 213,600
|
$ 42,720
|
3.3%
|
$ 6,996
|
$ 220,596
|
$ 44,119
|
$ 117
|
Dallas-Fort Worth,
TX
|
$ 214,800
|
$ 42,960
|
4.6%
|
$ 9,875
|
$ 224,675
|
$ 44,935
|
$ 165
|
Philadelphia,
PA
|
$ 218,200
|
$ 43,640
|
2.0%
|
$ 4,455
|
$ 222,655
|
$ 44,531
|
$ 74
|
Houston,
TX
|
$ 182,200
|
$ 36,440
|
2.8%
|
$ 5,059
|
$ 187,259
|
$ 37,452
|
$ 84
|
Washington,
DC
|
$ 385,300
|
$ 77,060
|
2.4%
|
$ 9,251
|
$ 394,551
|
$ 78,910
|
$ 154
|
Miami-Fort
Lauderdale, FL
|
$ 257,900
|
$ 51,580
|
1.6%
|
$ 4,080
|
$ 261,980
|
$ 52,396
|
$ 68
|
Atlanta,
GA
|
$ 182,700
|
$ 36,540
|
5.2%
|
$ 9,573
|
$ 192,273
|
$ 38,455
|
$ 160
|
Boston, MA
|
$ 430,700
|
$ 86,140
|
2.9%
|
$ 12,347
|
$ 443,047
|
$ 88,609
|
$ 206
|
San Francisco,
CA
|
$ 865,400
|
$ 173,080
|
1.3%
|
$ 11,538
|
$ 876,938
|
$ 175,388
|
$ 192
|
Detroit,
MI
|
$ 142,400
|
$ 28,480
|
3.7%
|
$ 5,218
|
$ 147,618
|
$ 29,524
|
$ 87
|
Riverside,
CA
|
$ 333,000
|
$ 66,600
|
4.8%
|
$ 15,949
|
$ 348,949
|
$ 69,790
|
$ 266
|
Phoenix,
AZ
|
$ 240,500
|
$ 48,100
|
2.8%
|
$ 6,800
|
$ 247,300
|
$ 49,460
|
$ 113
|
Seattle,
WA
|
$ 455,800
|
$ 91,160
|
5.2%
|
$ 23,651
|
$ 479,451
|
$ 95,890
|
$ 394
|
Minneapolis-St Paul,
MN
|
$ 247,200
|
$ 49,440
|
2.3%
|
$ 5,742
|
$ 252,942
|
$ 50,588
|
$ 96
|
San Diego,
CA
|
$ 553,900
|
$ 110,780
|
2.9%
|
$ 16,006
|
$ 569,906
|
$ 113,981
|
$ 267
|
St. Louis,
MO
|
$ 148,300
|
$ 29,660
|
2.2%
|
$ 3,324
|
$ 151,624
|
$ 30,325
|
$ 55
|
Tampa, FL
|
$ 188,300
|
$ 37,660
|
3.4%
|
$ 6,385
|
$
194,685
|
$ 38,937
|
$ 106
|
Baltimore,
MD
|
$ 262,000
|
$ 52,400
|
2.9%
|
$ 7,639
|
$ 269,639
|
$ 53,928
|
$ 127
|
Denver, CO
|
$ 372,800
|
$ 74,560
|
2.9%
|
$ 10,867
|
$ 383,667
|
$ 76,733
|
$ 181
|
Pittsburgh,
PA
|
$ 137,800
|
$ 27,560
|
2.6%
|
$ 3,625
|
$ 141,425
|
$ 28,285
|
$ 60
|
Portland,
OR
|
$ 369,700
|
$ 73,940
|
3.7%
|
$ 13,648
|
$ 383,348
|
$ 76,670
|
$ 227
|
Charlotte,
NC
|
$ 178,700
|
$ 35,740
|
4.2%
|
$ 7,422
|
$ 186,122
|
$ 37,224
|
$ 124
|
Sacramento,
CA
|
$ 373,600
|
$ 74,720
|
3.9%
|
$ 14,736
|
$ 388,336
|
$ 77,667
|
$ 246
|
San Antonio,
TX
|
$ 166,100
|
$ 33,220
|
2.7%
|
$ 4,415
|
$ 170,515
|
$ 34,103
|
$ 74
|
Orlando,
FL
|
$ 209,600
|
$ 41,920
|
4.2%
|
$ 8,764
|
$ 218,364
|
$ 43,673
|
$ 146
|
Cincinnati,
OH
|
$ 154,100
|
$ 30,820
|
2.7%
|
$ 4,126
|
$ 158,226
|
$ 31,645
|
$ 69
|
Cleveland,
OH
|
$ 136,300
|
$ 27,260
|
2.5%
|
$ 3,446
|
$ 139,746
|
$ 27,949
|
$ 57
|
Kansas City,
MO
|
$ 161,100
|
$ 32,220
|
3.0%
|
$ 4,775
|
$ 165,875
|
$ 33,175
|
$ 80
|
Las Vegas,
NV
|
$ 233,600
|
$ 46,720
|
5.9%
|
$ 13,731
|
$ 247,331
|
$ 49,466
|
$ 229
|
Columbus,
OH
|
$ 166,400
|
$ 33,280
|
3.4%
|
$ 5,653
|
$ 172,053
|
$ 34,411
|
$ 94
|
Indianapolis,
IN
|
$ 138,700
|
$ 27,740
|
3.2%
|
$ 4,486
|
$ 143,186
|
$ 28,637
|
$ 75
|
San Jose,
CA
|
$
1,052,500
|
$210,500
|
3.4%
|
$ 35,934
|
$
1,088,434
|
$ 217,687
|
$ 599
|
Austin, TX
|
$ 274,700
|
$ 54,940
|
3.3%
|
$ 9,171
|
$ 283,871
|
$ 56,774
|
$ 153
|
Zillow
Zillow is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow Group's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Launched in 2006, Zillow
is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i According to the first Zillow Housing Aspirations
Report (ZHAR), a semi-annual survey of 10,000 Americans seeking
insight into their views on homeownership and their housing
plans.
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SOURCE Zillow