Research reveals best locations for first time buyer down payment costs in the US
Saving for a down payment is one of the biggest hurdles to home ownership in the United States, but new research reveals which metros are best suited to first time buyers.
It takes an average of three years to save a 20% down payment on a starter home in Chicago but more than 13 years in Portland, Oregon, according to the research from real estate data firm Zillow.
The study 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.
While Chicago is the fastest of the 35 metros analysed, first time buyers in Dallas, Detroit and Baltimore may also find saving for a down payment takes less time than in other metros with the average millennial household needing just under four years to reach a down payment.
The report points out that since 44% of buyers move outside of their current city with their home purchase, knowing which metros can help ease some of the down payment burden can be valuable for first time buyers considering moving.
It also reveals that in Denver and San Jose and Riverside in California, it would take more than 10 years to save a down payment and while not everyone chooses to put down 20% on a home, it is a general good goal to aim for, especially for a first time buyer.
Indeed, according to the latest Zillow consumer housing trends report, some 37% if first time buyers, amounting to 45% of all buyers, choose to put 20% or more on their home purchase down payment.
‘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,’ said a spokesman.
‘However, in certain US housing markets first time buyers can find some relief, they just need to know where to look,’ he added.