Tag Archives: downpayment

First-Time Home Buyers Can Save a Down Payment the Fastest in Chicago and Dallas

Posted on by
Reply

It takes an average of three years to save a 20 percent down payment on a starter home in Chicago, but more than 13 years in Portland, Ore., according to an analysis from RealEstate.com

Seattle, WA – Aug. 20, 2018 (PRNewswire) Saving for a down payment is one of the biggest hurdles to homeownership. However, 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(i).

In Chicago, a first-time buyer will need about three years to save a 20 percent 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 percent down payment on starter home — or a home priced within the bottom third of the market.

Since nearly half (44 percent) 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(ii).

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 percent 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.

While not everyone chooses to put down 20 percent on a home, it is a good goal to aim for, especially for a first-time buyer. According to Zillow Group’s 2017 Consumer Housing Trends Report, 37 percent of first-time buyers (45 percent of all buyers) choose to put 20 percent 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.”

To help first-time buyers better understand the total cost of homeownership, RealEstate.com allows home shoppers to search based on homes’ “All-In Monthly Price,” which includes estimates for costs such as mortgage, property tax and utilities, giving them a more accurate picture of the cost of homeownership.

Markets where first-time buyers can save for a down payment the fastest:

Markets where it takes first-time buyers longer to save for a down payment:

About Zillow Group

Zillow Group, Inc. (NASDAQ: Z) (NASDAQ: ZG) houses a portfolio of the largest real estate and home-related brands on mobile and the web, which focus on all stages of the home lifecycle: renting, buying, selling and financing. Zillow Group is committed to empowering consumers with unparalleled data, inspiration and knowledge around homes, and connecting them with great real estate professionals. The Zillow Group portfolio of consumer brands includes real estate and rental marketplaces Zillow®, Trulia®, StreetEasy®, HotPads®, Naked Apartments®, RealEstate.com and Out East®. In addition, Zillow Group provides a comprehensive suite of marketing software and technology solutions to help real estate professionals maximize business opportunities and connect with millions of consumers. The Zillow Offers™ marketplace provides homeowners with the opportunity to receive offers from buyers, including Zillow in some metropolitan areas. When Zillow buys a home, it will make necessary updates and list the home for resale on the open market. The company operates a number of business brands for real estate, rental and mortgage professionals, including Mortech®, dotloop®, Bridge Interactive® and New Home Feed®. The company is headquartered in Seattle.

Zillow, Mortech, Bridge Interactive, StreetEasy, HotPads, Out East and New Home Feed are registered trademarks of Zillow, Inc. Zillow Offers is a trademark of Zillow, Inc. Trulia is a registered trademark of Trulia, LLC. dotloop is a registered trademark of DotLoop, LLC. Naked Apartments is a registered trademark of Naked Apartments, LLC.

(i) RealEstate.com estimated the income of employed young adult renters using data from the U.S. Census Bureau’s 2016 American Community Survey, updating incomes through 2018 Q1 using data from the Bureau of Labor Statistics’ Current Employment Statistics. Savings rates for renters were then applied based on data collected as part of the March 2018 Zillow Group Housing Aspirations Report to estimate how much renters save each year. Assuming that a first-time buyer is searching for a home in the bottom third of the home value distribution and puts 20 percent of the home’s value as a down payment, RealEstate.com then calculated how long it would take to save for the down payment.

(ii) According to Zillow Group Consumer Housing Trends Report 2017.

It Takes 11 Years for a Single Homebuyer to Save for a Down Payment

Posted on by
Reply

– Saving for a down payment on the median U.S home takes six years longer for a single person than a couple, according to a new Zillow analysis.

– Less than half of all U.S. homes are affordable for a single homebuyer.

– A single buyer can afford a home up to $176,100, less than the national median home value.

– A married or partnered couple could afford a home worth more than twice as much as a home a single homebuyer could afford.

Seattle, WA – Feb. 9, 2018 (PRNewswire) In today’s highly competitive housing market, finding an affordable home can feel increasingly out of reach, especially for singles.

A single homebuyer would need to save for nearly 11 years to reach a 20 percent down payment on the typical U.S. home, according to a new Zillow® analysis. However, for married or partnered couples, it would take less than five years. In San Jose, California, a single buyer would need more than 30 years to save for a down payment – longer than the lifespan of a typical home loan.

Zillow’s analysis combined home values and income data from Census to estimate how long it would take for both an individual and couple to save for a 20 percent down payment on the median-priced home, assuming they saved 10 percent of their income every year.

Single buyers typically have a smaller budget than couples, which leaves them with fewer homes to choose from and limits them to the most in-demand portion of the housing stock. The number of homes for sale is limited across the country, down nearly 11 percent over the past year, and nearly 18 percent for the least expensive homes. A single person could afford to buy less than half (45 percent) of the U.S. housing stock, compared to a married or partnered couple, who could afford 82 percent of all homes.

“Nearly two-thirds of Americans agree that buying a home is a central part of living the American Dream, but for unmarried or un-partnered Americans, that dream is increasingly out of reach,” said Zillow senior economist Aaron Terrazas. “Single buyers typically have more limited budgets, which means they are likely competing for lower-priced homes that are in high demand. Having two incomes allows buyers to compete in higher priced tiers where competition is not as stiff.”

The difference between what a single person could afford compared to a couple is greatest in Portland, Oregon, and Sacramento, California. In Portland, 73 percent of homes are affordable to a couple, but only 6 percent are affordable to a single buyer. For Sacramento buyers, a couple could afford 75 percent of homes while a single homebuyer could afford 8 percent of homes.

Single buyers will have it easiest in Indianapolis, where saving for a down payment takes less than eight years, and they can afford the highest share of homes among the largest American housing markets.

Zillow
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts, and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.