Down payments: How soon can each generation afford one?
By Kelly Leighton | Dec. 23, 2015 | 2 min. read
With home sales continuing to rise, how long will it take for the average resident to save up for a 10 percent down payment?
According to Builder Online, millennials and retirees will have the longest wait to save that 10 percent for a down payment on a home. Younger millennials, defined as those age 18-24, will have to wait the longest, an average of 8.77 years, to put 10 percent down on a home costing $221,600, which is the median home price for their age group. The monthly mortgage payment average is $597.
Those 65 and older will have the second-longest wait, as saving 10 percent for a down payment on a house costing $291,000, which is the median home price for the age group, should take about 7.37 years. Their average monthly mortgage payment is $532.
Meanwhile, those 45-54 have will have the shortest wait, only needing a little more than 3.5 years to save up 10 percent. Their down payment would be the most costly, as their median home price is $323,400. Their average monthly mortgage payment is $891.
In Pennsylvania, to put down 10 percent for a home, it takes an average of 7.07 years. The monthly rent average is $848. The median home price in the commonwealth is $334,200, and the median household income is $53,234.
While Hawaii may sound nice, it will take residents the longest to save up for their 10 percent down payment. A household with a median income will need nearly 27 years to save for a 10 percent down payment on the median home price, which is $565,100.
Using data from Metrostudy and the Census Bureau, Builder Online analyzed 2015 median new home prices, 2014 median household incomes, which is the latest available, and median monthly rental costs in each state, as the majority of people rent before purchasing a home.
Topicshomebuyers retirement millennials
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