If you’re struggling to save up for a down payment on your first home, you could do a lot worse than move to Chicago, where it’s possible to do so within just three years, according to a new analysis from RealEstate.com.
The property listings site analyzed industry data to come up with the top ten metros where first-time buyers should find it easier to save for their first home, and also ten metros where it would probably be the most difficult.
The analysis found that in Chicago, a first-time buyer would only need around three years to save for a 20 percent down payment on a typical starter home, which is the fastest time in all 35 metros analyzed. Other metros, including Dallas, Detroit and Baltimore, take an average of just four years saving time.
Realestate.com factored into its equations the median household income for millennials (aged 24 to 36 years), then estimated how much their annual savings would be in order to determine how long it would take to save for a down payment on a starter home, or one that’s priced within the bottom third of the market.
The company says the study is relevant because almost half of all first-time buyers move outside of their current city when buying their first property.
In contrast to Chicago, the estimated time it would take to save for a down payment on a home in Portland, Oregon, is a staggering 13 years. That’s because the estimated annual savings for a millennial household in Portland are just $5,288 (compared to $10,821 in Chicago) and home values are much higher.
Those living in cities including Denver, and San Jose and Riverside in California, would also take more than ten years of saving to afford a 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 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.