One of the biggest hurdles homebuyers face is saving for a
down payment. As you’re budgeting and planning for your home purchase, you’ll
want to understand how much you’ll need to put down and how long it will take
you to get there. The process may actually move faster than you think.
Using data from the U.S. Department of Housing and Urban
Development (HUD) and Apartment List, we can estimate how long it might take someone
earning the median income and paying the median rent to save up for a down
payment on a median-priced home. Since saving for a down payment can be a great
time to practice budgeting for housing costs, this estimate also uses the
concept that a household should not pay more than 28% of their total income on
monthly housing expenses.
According to the data, the national average for the time it
would take to save for a 10% down payment is right around two and a half years
(2.53). Residents in Iowa can save for a down payment the fastest, doing so in
just over one year (1.31). The map below illustrates this time (in years) for
What if you only need to save 3%?
What if you’re able to take advantage of one of the 3% down
payment programs available? It’s a common misconception that you need a 20%
down payment to buy a home, but there are actually more affordable options and
down payment assistance programs available, especially for first-time buyers.
The reality is, saving for a 3% down payment may not take several years. In
fact, it could take less than a year in most states, as shown in the map below:
Wherever you are in the process of saving for a down
payment, you may be closer to your dream home than you think. Let’s connect to
explore the down payment options available in our area and how they support