Moving Home Could Help Renters Save for a Down Payment in Less than Two Years – Wire Real Estate

Moving Home Could Help Renters Save for a Down Payment in Less than Two Years


Moving Home Could He

iCrowdNewswire   Feb 5, 2021  11:06 AM ET

Saving for a down payment is one of the biggest barriers to homeownership. For the record number of young adults who moved back home during the pandemic fortunate to still have a job, homeownership may be more attainable than they think, according to a new report released today by realtor.com®.

For someone paying the U.S. median one-bedroom rent of $1,533, it would take 11 months to save $17,000, a 5% down payment for a $340,000 home, the median-priced home in the U.S., according to realtor.com®‘s analysis of listing and rental data for the U.S. and the nation’s 20 largest metros in December 2020.

Across the 20 largest metros,  it would take longer, an average of 15 months in order to save up for a 5% down payment based on home prices and rent savings in each market. It’s fastest to save for a 5% down payment in Chicago followed by Philadelphia, and St. Louis, while it takes the longest amount of time in Los AngelesSan Francisco, and San Diego.

“Although many members of the millennial and Gen Z generations were forced to move home because they lost their jobs in 2020, others chose to forgo their rental  because they had the opportunity to work remotely and preferred to wait out the pandemic with family,” said realtor.com® Chief Economist Danielle Hale. “For those who have been able to channel their would-be rent into savings, the pandemic’s silver lining could be becoming a homeowner sooner than they otherwise would have.”

In Chicago, based on the median rent for a one-bedroom apartment of $1,521, it would take 11 months to save $16,350, a 5% down payment on the median list price home of $327,000.  At the opposite end of the spectrum, in Los Angeles, where the median list price for a home is just under $1 million and the median one-bedroom rent is $2,250, it would take 22 months to save for a 5% down payment of $50,000.

Months of Rent Needed to Save for a Typical Down Payment (20 largest metros)

Metro

1-bed
Median
Rent

Median
Listing
Price

5%
Down
Payment

Months of
Saving for
Down
Payment

Atlanta-Sandy Springs-Roswell, Ga.

$1,310

$350,000

$17,500

13

Boston-Cambridge-Newton, Mass.-N.H

$2,109

$649,000

$32,450

15

Chicago-Naperville-Elgin, Ill.-Ind.-Wis.

$1,521

$327,000

$16,350

11

Dallas-Fort Worth-Arlington, Texas

$1,125

$354,000

$17,700

16

Denver-Aurora-Lakewood, Colo.

$1,495

$533,000

$26,650

18

Detroit-Warren-Dearborn, Mich.

$970

$252,000

$12,600

13

Houston-The Woodlands-Sugar Land, Texas

$1,060

$330,000

$16,500

16

Los Angeles-Long Beach-Anaheim, Calif.

$2,250

$999,000

$49,950

22

Miami-Fort Lauderdale-West Palm Beach, Fla.

$1,691

$409,000

$20,450

12

Minneapolis-St. Paul-Bloomington, Minn.-Wis.

$1,358

$344,000

$17,200

13

New York-Newark-Jersey City, N.Y.-N.J.-Pa.

$2,345

$627,000

$31,350

13

Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md

$1,495

$327,000

$16,350

11

Phoenix-Mesa-Scottsdale, Ariz.

$1,195

$413,000

$20,650

17

Riverside-San Bernardino-Ontario, Calif.

$1,610

$475,000

$23,750

15

San Diego-Carlsbad, Calif.

$2,000

$797,000

$39,850

20

San Francisco-Oakland-Hayward, Calif.

$2,414

$995,000

$49,750

21

Seattle-Tacoma-Bellevue, Wash.

$1,657

$628,000

$31,400

19

St. Louis, Mo.-Ill.

$1,035

$232,000

$11,600

11

Tampa-St. Petersburg-Clearwater, Fla.

$1,225

$300,000

$15,000

12

Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.

$1,767

$497,000

$24,850

14

Methodology: To calculate down payment savings realtor.com® analyzed listing and rental data from December 2020. The national median down payment was 5 percent in December.

Media Contact

Janice McDill, janice.mcdill@move.com

Contact Information:

Janice McDill, janice.mcdill@move.com


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