How Long It Takes to Save for a Down Payment


How Long It Takes to Save for a Down Payment

Renters in some cities may face a long road toward home ownership. Faced with high rents, some may even have to wait a few decades before they'll be able to save enough for a down payment – that is, if they keep saving at the same rate, finds a new survey by Apartment List.

Millennial renters in San Francisco may have the most trouble saving for a down payment. Renters living there will need to wait, on average, 28 years in order to save for a 20 percent down payment on a home (assuming rates of saving remain the same), the survey finds. In places like Sacramento, renters can expect 27 years of saving, and 18 years in Denver.


Apartment List researchers analyzed median prices of starter homes in 130 cities and 93 metro areas and then asked survey respondents to reveal how much they were saving and what they think their family or friends would also chip in for a down payment. From there, they calculated how long it would take renters to buy a home in their city.

Researchers found that for many survey respondents, they just aren’t saving enough for a down payment. For example, in San Francisco, millennial respondents estimated that they need about $69,650 for a down payment, which is about half the $142,800 really needed for a 20 percent down payment (the median home price in San Francisco is $1.2 million, according to®). In Sacramento, millennial renters said they’re saving about $26,720 for a down payment, but they really need about $43,580 for a 20 percent down payment.

“It’s not really surprising, as home prices have really shot up so much,” says Andrew Woo, a data scientist at Apartment List. But “it seems like a lot of millennials don’t realize they’re not saving enough.”

The survey does not take into account those who can use other savings accounts, such as a 401(k) to fund a down payment, and those with strong credit who may be able to qualify for a mortgage with only a 10 percent down payment. Also, there are special loan programs that require only a 3 percent down payment, in some cases.

In some places, renters aren’t having a problem and won’t need to save nearly as much to jump into home ownership. For example, in Detroit, many young home buyers already have around the $3,600 down payment needed to buy the median price starter home there at about $18,000. In Dallas and Houston, renters need about six years to save for a down payment in their city, the survey finds.

Source: “The Affordability Crisis: What Happens When Millennials Can’t Afford to Buy Homes?” Apartment List (April 13, 2016) and “How Long Will It Take to Save Up for a Home in Your City?”® (April 20, 2016)

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