Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to determine how to save for a down payment and how long it would take you to save for a down payment in each state?
Using data from the United States Census Bureau and Zillow, we determined how long it would take nationwide for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that households should not pay more than 28% of their income on their monthly housing expense.
By determining the percentage of income spent renting a 2-bedroom apartment in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.
According to the data, residents in Iowa can save for a down payment the quickest in just under two years (1.99). Below is a map created using the data for each state:
What if you only needed to save 3%?
What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3% down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years but becomes attainable in a year or two in many states, as shown in the map below.
Whether you have just started to save for a down payment or have been saving for years, you may be closer to your dream home than you think! Let’s meet up so I can help you evaluate your ability to buy today. Feel free to contact me!