Buying a house can be an exciting process—but also pretty draining, particularly when it comes to figuring out the financial cost of it all. And while it is still viably possible to buy a property that you love, the timing may take a bit longer than you think, according to a recent startling report.
Using 1.8 million for-sale listings gathered between July 1 and Dec. 31, 2022, RealtyHop reported how long it would take to buy a house in 150 major cities across the United States. In order to do this, they looked at the average household income in the area using data from the U.S. Census Bureau, as well as taking into account the average annual savings and median listing price for houses available within those areas. The total average years required is based on how long it would take for that household to be able to save for a 20% down payment.
While some cities still offer affordable houses and reasonable timelines for buying, other major cities require a bit—or a lot—more time before buying property is even possible. Based on their findings, here’s how long you would have to wait and how much you would expect to pay for a house.
How Long Does It Take to Save for a House?
The amount of time it will take to save up enough money for a 20% down payment on the house will vary from city to city, based on average household income and the median listing price within the area. For example, while San Francisco has a much higher median listing than Los Angeles, the average number of years it takes to save for a house is fewer due to the typical household income for residents living within that area.
Depending on the area you reside in, it could take anywhere between 2.5 to 15 years to save enough money to buy property—depending on your own personal household income, of course.
After reporting the average time it takes for one to save enough money for a house, RealtyHop’s report also includes a list of favorite cities to buy in if you’re looking to obtain a house quickly in an up-and-coming city. These cities include Pittsburgh, Pennsylvania (3.87 years, average cost $210,000), Rochester, New York (4.24 years, $169,900), Des Moines, Iowa (3.25 years, $190,000), Cleveland, Ohio (3.41 years, $114,900), Montgomery, Alabama (3.5 years, $175,000) and more.
And while California tends to be one of the more expensive states to live in, RealtyHop marks Bakersfield, California as a great option for a West Coast home—with just 4.49 years and a median price of $310,000.
Of course, you should also factor in the cost of things you would pay for before buying a house.
How Long It Takes to Save for a House in Major Cities Around the Country
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If you’re looking to buy a house in some of the major cities across the United States, here’s how long the average resident will have to save for the traditional 20% down payment.
- Los Angeles, CA: 13.47 years, median listing of $940,000
- New York, NY: 12.45 years, median listing of $880,000
- Miami, FL: 12.49 years, median listing of $598,000
- San Francisco, CA: 10.5 years, median listing of $1,325,000
- Boston, MA: 9.16 years, median listing of $749,000
- Jersey City, NJ: 8.59 years, median listing of $699,000
- Washington, DC: 7.16 years, median listing of $669,900
- Austin, TX: 6.84 years, median listing of $540,000
- Portland, OR: 6.44 years, median listing of $505,000
- Chicago, IL: 5.17 years, median listing of $340,000
So whether you decide to wait just three years or a full 15 to live in the area you enjoy, be sure to check out these things to consider when buying a house.
FAQs
According to a recent study by Zillow, a home buyer making the national median income of $82,156 would have to save for 12 years, assuming a 10 percent savings rate plus interest, in order to accumulate the $127,743 down payment needed to afford a mortgage on a typical U.S. home costing $360,681.
How long does it realistically take to save for a house? ›
Saving for the down payment
First, figure out what percentage of your dream home's price tag you want to put down. One report from Zillow in 2023 said it can take up to 11 years for the typical homebuyer to save up for a 20% downpayment!
How many years does it take to pay for a house? ›
Many homeowners dream of having a paid-off home and achieving financial freedom sooner, but they are often uncertain about how to make it happen. Homeowners typically make their normal monthly mortgage payments and expect to pay off their homes over 30 years.
How to save for a house in 5 years? ›
3. Make a Savings Plan
- List the sources of income and savings you already have. Include your current after-tax income, cash savings, investments, gifts from family and inheritances. ...
- Track your spending. ...
- Consider ways to increase your income in the next five years. ...
- Reduce big-ticket expenses. ...
- Choose a budgeting method.
It's a good idea to put away anywhere from 25% to 30% of your home's purchase price to account for your down payment, closing costs and other assorted expenses. Aiming to save 25% should cover the bare minimum – a 20% down payment, plus 5% in closing costs.
How to save 100K in 5 years? ›
Five tips to help you save $100,000 faster
- Live below your means and cut frivolous spending. ...
- Be hyper-aware of every monthly expense and ruthlessly cut back to save faster. ...
- Pay down high-interest debts like credit cards first. ...
- Find the financial institution that will get you the highest interest rate.
How Long Does It Take To Save a Down Payment?
| Time To Save Up a Downpayment |
|---|
| $1,000/month | 3.33 (40 months) |
| $1,500/month | 2.22 years (26.67 months) |
| $2,000/month | 1.67 years (20 months) |
| $2,500/month | 1.33 years (16 months) |
3 more rowsWith a $70,000 annual salary and using a 50% DTI, your home buying budget could potentially afford a house priced between $180,000 to $280,000, depending on your financial situation, credit score, and current market conditions. This range is higher than what you might qualify for with more traditional DTI limits.
How much is a $200000 mortgage payment for 30 years? ›
Monthly payments for a $200,000 mortgage
| Interest rate | Monthly payment (15-year mortgage) | Monthly payment (30-year mortgage) |
|---|
| 6.50% | $1,742 | $1,264 |
| 6.75% | $1,770 | $1,297 |
| 7.00% | $1,798 | $1,331 |
| 7.25% | $1,826 | $1,364 |
4 more rowsThe average monthly mortgage payment on a $250K loan with a 30-year fixed term and an interest rate of 7% is about $1,663. Keep in mind that this monthly payment doesn't include additional mortgage fees such as property taxes and homeowners insurance.
A good rule of thumb is usually 5 years for homeowners to get a good sale price. The 5-year-rule allows you to make up for certain costs you paid when you got your loan as well as determining the breakeven point.
How much to save a month for a house? ›
Short-Term Savings
If you begin saving 20% of your income each month, you could be in a good position to not only qualify for a loan with a reasonable interest rate, but also to be able to have a sufficient down payment ready. You should be paying close attention to your gross income (vs.
What is the best account to save for a house? ›
Savings accounts offer lower risk, while investing can potentially offer higher returns but with more risk. If you have a shorter timeline for purchasing a house (within the next few years), it may be better to save in a high-yield savings account or a CD to ensure the money is there when you need it.
Is $10,000 enough to put down on a house? ›
To purchase a $200,000 house, you need a down payment of at least $40,000 (20% of the home price) to avoid PMI on a conventional mortgage. If you're a first-time home buyer, you could save a smaller down payment of $10,000–20,000 (5–10%).
What is a good credit score to buy a house? ›
What is a good credit score range for buying a home? If your credit score range is between 740 and 850, you are likely to have the widest range of choices and the most attractive interest rates for your mortgage loan.
Why is renting better than owning? ›
Moving flexibility: You have much more flexibility with changing your home and moving around. This is great for individuals not set on living in the same place for years to come. Building credit: Renting can help build your credit if you can't buy yet, or give credit references if you're a good renter and need them.
How long does it take to save 100K? ›
Saving Your First $500K
| First $100K | 7.84 years |
|---|
| Second $100K | 5.10 years |
| Third $100K | 3.78 years |
| Fourth $100K | 3.01 years |
| Fifth $100K | 2.50 years |
Do you actually save money buying a house? It depends on many factors, including how expensive the house is and where it's located. Often, once you get past the one-time down payment and closing costs, your monthly mortgage payment is lower than rent would be. But that can vary by market.
How long do you have to live in a house to make it worth it? ›
Is It Too Soon To Sell Your House? Real estate agents suggest you stay in a house for 5 years to recoup costs and make a profit from selling. Before you put your house on the market, consider how your closing fees, realtor fees, interest payments and moving fees compare to the amount you have in equity.
When should I start saving for a house? ›
You should start saving for a house as soon as possible. Saving for a down payment takes time depending on how much you're able to save each month. If you're not able to save as much, starting sooner will ensure you have enough time to save up for your down payment to buy a house when you want or need to.
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