The Struggles of Saving for a Home

According to Unison’s 2019 Home Affordability Report, it now takes 14 years for those making a median income to save for a 20% down payment on a median-price homes, meaning many prospective millennial homebuyers won’t achieve homeownership until their 40s.

The report states that the monthly payment needed to support a home purchase with a down payment of 20% grew by 12% between 2017 and 2018, far outpacing the growth of income during that period of 6%.

Unison found that it takes prospective homebuyers in Los Angeles an average of 43 years to save the necessary 20% for a down payment on a median-priced home. Prospective homebuyers in Detroit, Michigan, have to wait just seven years, the shortest in the nation, to save the necessary 20%.

Along the West Coast, metros such as San Francisco, California (40 years), San Diego, California (31 years), San Jose, California (31 years), and Honolulu, Hawaii (40 years) had among the nation’s longest waits.

San Francisco had the highest average monthly payment at $5,052, followed by San Jose’s $3,187. The average monthly payment in Los Angeles was $3,048. A San Francisco resident would need an average income of $202,094 to pay the necessary 20% down payment.

Detroit had the lowest average monthly payment of $251, and was followed by Milwaukee, Wisconsin ($635), and Wichita, Kansas ($639.)

Homeowners in Phoenix, Arizona, have seen the median income increased 7% year-over-year, while there monthly payments have grown 20% over that same period. Richmond, Virginia, has seen median incomes fall 5% since last year as monthly house payments have grown 7%.

Homes in Phoenix are also among those that have seen their home values increase the most year-over-year, boosting a 13% increase. Miami, Florida, has the highest home value increase in the nation at 19%.

Nashville, Tennessee, leads the nation with its annual income increasing 17% since 2018, which out paces monthly payment growth by 4%—the nation’s largest gap.

Despite the affordability issues nationwide, the report found that median home values increased 6% nationwide between 2017-2018.