Saving for a Down Payment? This is How Long It Will Take..
Depending on where you live, saving for a down payment can take several years of financial planning. For example, in some markets, it may take the average person nearly a decade to save enough to buy a home. In California, that especially rings true.
California is home to four of the five cities on a recent list by SmartAsset of the places where it takes the longest to save for a down payment: San Francisco, Los Angeles, San Jose, and San Diego.
SmartAsset scanned the data on median home prices and median household income in the 15 largest cities in the U.S. From there, researchers calculated how long it would take for a household to save enough for a 20 percent down payment if consumers saved 20 percent of their incomes. (Note: Buyers are not required to have 20 percent down for a mortgage. It’s often recommended, but buyers can take advantage of several other low-down payment loan offerings.)
Here’s how many years buyers can expect to wait to save enough to afford a 20 percent down payment in these cities:
- San Francisco, Calif.: 9.84 years
- Los Angeles, Calif.: 9.38
- New York, N.Y.: 9.27
- San Jose, Calif.: 7.20
- San Diego, Calif.: 7.01
- Chicago, Ill.: 4.59
- Austin, Texas: 4.17
- Philadelphia, Pa.: 3.80
- Phoenix, Ariz.: 3.45
- Dallas, Texas: 3.09
- Jacksonville, Fla.: 2.92
- Houston, Texas: 2.85
- Columbus, Ohio: 2.83
- Indianapolis, Ind.: 2.82
- San Antonio, Texas: 2.50
Source: “Years of Work Needed to Afford a Down Payment in 15 Cities,” SmartAsset.com (Jan. 31, 2017)