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 difficult.
In Chicago, a first-time buyer will need about three years to save a 20% 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% down payment on starter home — or a home priced within the bottom third of the market.
early half (44%) of buyers move outside of their current city with their home purchase.
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% 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.
According to Zillow Group’s 2017 Consumer Housing Trends Report, 37% of first-time buyers (45% of all buyers) choose to put 20% 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.”
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 |
