SEATTLE, Aug. 20, 2018 /PRNewswire/ -- Saving for a
down payment is one of the biggest hurdles to homeownership.
However, a new analysis from RealEstate.com, a Zillow Group® brand,
identifies 10 metros where first-time buyers may find it easier to
save for their future home purchase, and 10 metros where it may be
more difficulti.
In Chicago, a first-time buyer
will need about three years to save a 20 percent down payment on
the typical starter home – the fastest of the 35 metros analyzed.
First-time buyers in Dallas,
Detroit and Baltimore may also find saving for a down
payment to take less time than in other metros – with the average
millennial household needing just under four years to reach a down
payment.
RealEstate.com's analysis factored in the median household
income among millennials (ages 24-36) and their estimated annual
household savings to determine how long it would take to save for a
20 percent down payment on starter home -- or a home priced within
the bottom third of the market.
Since nearly half (44 percent) of buyers move outside of their
current city with their home purchase, knowing which metros can
help ease some of the down payment burden can be valuable for
first-time buyers considering movingii.
In Portland, Ore., the
estimated annual savings for a millennial household is $5,288 – nearly half of what it is in
Chicago ($10,821). Less savings combined with higher home
values means a first-time buyer in Portland would need to save for more than 13
years to reach a 20 percent down payment on a starter home – the
longest of the metros analyzed. In Denver, San Jose,
Calif., and Riverside,
Calif., it would take more than 10 years to save a down
payment.
While not everyone chooses to put down 20 percent on a home, it
is a good goal to aim for, especially for a first-time buyer.
According to Zillow Group's 2017 Consumer Housing Trends Report, 37
percent of first-time buyers (45 percent of all buyers) choose to
put 20 percent down or more on their home purchase.
"Contrary to popular belief, millennials want to buy homes, but
high home prices, low inventory and stagnant wage growth are some
of the many factors that may be driving would-be buyers into
delaying homeownership," says Justin
LaJoie, RealEstate.com General Manager. "However, in certain
U.S. housing markets first-time buyers can find some relief; they
just need to know where to look."
To help first-time buyers better understand the total cost of
homeownership, RealEstate.com allows home shoppers to search based
on homes' "All-In Monthly Price," which includes estimates for
costs such as mortgage, property tax and utilities, giving them a
more accurate picture of the cost of homeownership.
Markets where first-time buyers can save for a down payment
the fastest:
Metro
Name
|
Annual
Income
Among
Millennial
Households,
2018-Q1 (Est)
|
Annual
Savings
Among
Millennial
Households,
2018-Q1
(Est)
|
Median
Home Value,
Entry Level
Single-Family
Home (2018-
Q1)
|
20 Percent
Down
Payment on
Median Entry-
Level Home
|
Years to
Save for 20
Percent
Down
Payment
on Median
Entry-Level
Home
|
Chicago,
IL
|
$50,500
|
$10,821
|
$177,300
|
$35,460
|
3 years 3
months
|
Dallas-Fort Worth,
TX
|
$50,600
|
$10,843
|
$185,400
|
$37,080
|
3 years 5
months
|
Detroit,
MI
|
$43,100
|
$5,388
|
$96,700
|
$19,340
|
3 years 7
months
|
Baltimore,
MD
|
$54,300
|
$11,636
|
$214,000
|
$42,800
|
3 years 8
months
|
Indianapolis,
IN
|
$39,400
|
$6,567
|
$122,500
|
$24,500
|
3 years 9
months
|
Pittsburgh,
PA
|
$41,700
|
$5,212
|
$103,600
|
$20,720
|
4 years
|
Cleveland,
OH
|
$42,900
|
$5,362
|
$109,600
|
$21,920
|
4 years 1
month
|
St. Louis,
MO
|
$43,200
|
$5,400
|
$119,900
|
$23,980
|
4 years 5
months
|
Austin, TX
|
$50,700
|
$10,864
|
$249,700
|
$49,940
|
4 years 7
months
|
Washington,
DC
|
$67,900
|
$14,550
|
$343,000
|
$68,600
|
4 years 9
months
|
Markets where it takes first-time buyers longer to save for a
down payment:
Metro
Name
|
Annual
Income
Among
Millennial
Households,
2018-Q1 (Est)
|
Annual
Savings
Among
Millennial
Households,
2018-Q1
(Est)
|
Median
Home Value,
Entry Level
Single-Family
Home (2018-
Q1)
|
20 Percent
Down
Payment on
Median Entry-
Level Home
|
Years to
Save for 20
Percent
Down
Payment
on Median
Entry-Level
Home
|
Portland,
OR
|
$42,300
|
$5,288
|
$347,200
|
$69,440
|
13 years 2
months
|
Denver, CO
|
$47,100
|
$5,888
|
$365,600
|
$73,120
|
12 years 5
months
|
San Jose,
CA
|
$94,900
|
$18,980
|
$1,133,100
|
$226,620
|
11 years 11
months
|
Riverside,
CA
|
$47,600
|
$5,950
|
$306,200
|
$61,240
|
10 years 4
months
|
Miami-Fort
Lauderdale, FL
|
$41,900
|
$5,238
|
$269,500
|
$53,900
|
10 years 3
months
|
Los Angeles-Long
Beach-Anaheim, CA
|
$52,700
|
$11,293
|
$575,200
|
$115,040
|
10 years 2
months
|
San Diego,
CA
|
$52,500
|
$11,250
|
$543,400
|
$108,680
|
9 years 8
months
|
San Francisco,
CA
|
$83,300
|
$16,660
|
$795,800
|
$159,160
|
9 years 7
months
|
Las Vegas,
NV
|
$46,100
|
$5,762
|
$241,400
|
$48,280
|
8 years 5
months
|
Phoenix,
AZ
|
$43,000
|
$5,375
|
$224,300
|
$44,860
|
8 years 4
months
|
About Zillow Group
Zillow Group, Inc. (NASDAQ:Z) (NASDAQ:ZG) houses a portfolio of
the largest real estate and home-related brands on mobile and the
web, which focus on all stages of the home lifecycle: renting,
buying, selling and financing. Zillow Group is committed to
empowering consumers with unparalleled data, inspiration and
knowledge around homes, and connecting them with great real estate
professionals. The Zillow Group portfolio of consumer brands
includes real estate and rental marketplaces Zillow®, Trulia®,
StreetEasy®, HotPads®, Naked Apartments®, RealEstate.com and Out
East®. In addition, Zillow Group provides a comprehensive suite of
marketing software and technology solutions to help real estate
professionals maximize business opportunities and connect with
millions of consumers. The Zillow Offers™ marketplace provides
homeowners with the opportunity to receive offers from buyers,
including Zillow in some metropolitan areas. When Zillow buys a
home, it will make necessary updates and list the home for resale
on the open market. The company operates a number of business
brands for real estate, rental and mortgage professionals,
including Mortech®, dotloop®, Bridge Interactive® and New Home
Feed®. The company is headquartered in Seattle.
Zillow, Mortech, Bridge Interactive, StreetEasy, HotPads, Out
East and New Home Feed are registered trademarks of Zillow, Inc.
Zillow Offers is a trademark of Zillow, Inc. Trulia is a registered
trademark of Trulia, LLC. dotloop is a registered trademark of
DotLoop, LLC. Naked Apartments is a registered trademark of Naked
Apartments, LLC.
i RealEstate.com estimated the income of employed
young adult renters using data from the U.S. Census Bureau's 2016
American Community Survey, updating incomes through 2018 Q1 using
data from the Bureau of Labor Statistics' Current Employment
Statistics. Savings rates for renters were then applied based on
data collected as part of the March
2018 Zillow Group Housing Aspirations Report to estimate how
much renters save each year. Assuming that a first-time buyer is
searching for a home in the bottom third of the home value
distribution and puts 20 percent of the home's value as a down
payment, RealEstate.com then calculated how long it would take to
save for the down payment.
ii According to Zillow Group Consumer Housing Trends
Report 2017.
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SOURCE Zillow Group, Inc.