The coronavirus pandemic has pushed millions of Americans, especially young adults, to move in with … [+]
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Saving for a down payment is one of the biggest barriers to homeownership. But for the record number of young adults who moved back home during the pandemic and are fortunate to still have a job, homeownership may be more attainable than they think, according to a new report released today by realtor.com.
By channeling their would-be rent into savings, homeownership could be within reach. For someone paying the median one-bedroom rent of $1,533, it would take 11 months to save $17,000, a 5% down payment for a $340,000 home, the median-priced home in the nation, according to realtor.com’s analysis of listing and rental data for the U.S. and the nation’s 20 largest metros in December 2020.
Across the 20 largest metros, it would take longer, an average of 15 months to save up for a 5% down payment based on home prices and rent savings in each market. It’s fastest to save for a 5% down payment in Chicago followed by Philadelphia and St. Louis, while it takes the longest amount of time in Los Angeles, San Francisco and San Diego.
“Although many members of the Millennial and Gen Z generations were forced to move home because they lost their jobs in 2020, others chose to forgo their rentals because they had the opportunity to work remotely and preferred to wait out the pandemic with family,” said realtor.com chief economist Danielle Hale. “For those who have been able to channel their would-be rent into savings, the pandemic’s silver lining could be becoming a homeowner sooner than they otherwise would have.”
In Chicago, for example, based on the median rent for a one-bedroom apartment of $1,521, it would take 11 months to save $16,350, a 5% down payment on the median list price home of $327,000.
At the opposite end of the spectrum, in Los Angeles, where the median list price for a home is just under $1 million and the median one-bedroom rent is $2,250, it would take 22 months to save for a 5% down payment of $50,000.
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Atlanta-Sandy Springs-Roswell, Georgia
One-bedroom median rent: $1,310
Median listing price: $350,000
5% down payment: $17,500
Months of saving for down payment: 13
Boston-Cambridge-Newton, Massachusetts-New Hampshire
One-bedroom rent: $2,109
Median listing price: $649,000
5% down payment: $32,450
Months of saving for down payment: 15
Chicago-Naperville-Elgin, Illinois-Indiana-Wisconsin
One-bedroom rent: $1,521
Median listing price: $327,000
5% down payment: $16,350
Months of saving for down payment: 11
Dallas-Fort Worth-Arlington, Texas
One-bedroom rent: $1,125
Median listing price: $354,000
5% down payment: $17,700
Months of saving for down payment: 16
Denver-Aurora-Lakewood, Colorado
One-bedroom rent: $1,495
Median listing price: $533,000
5% down payment: $26,650
Months of saving for down payment: 18
Detroit-Warren-Dearborn, Michigan
One-bedroom rent: $970
Median listing price: $252,000
5% down payment: $12,600
Months of saving for down payment: 13
Houston-The Woodlands-Sugar Land, Texas
One-bedroom rent: $1,060
Median listing price: $330,000
5% down payment: $16,500
Months of saving for down payment: 16
Los Angeles-Long Beach-Anaheim, California
One-bedroom rent: $2,250
Median listing price: $999,000
5% down payment: $49,950
Months of saving for down payment: 22
Miami-Fort Lauderdale-West Palm Beach, Florida
One-bedroom rent: $1,691
Median listing price: $409,000
5% down payment: $20,450
Months of saving for down payment: 12
Minneapolis-St. Paul-Bloomington, Minneapolis-Wisconsin
One-bedroom rent: $1,358
Median listing price: $344,000
5% down payment: $17,200
Months of saving for down payment: 13
New York-Newark-Jersey City, New Jersey-Pennsylvania
One-bedroom rent: $2,345
Median listing price: $627,000
5% down payment: $31,350
Months of saving for down payment: 13
Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware, Maryland
One-bedroom rent: $1,495
Median listing price: $327,000
5% down payment: $16,350
Months of saving for down payment: 11
Phoenix-Mesa-Scottsdale, Arizona
One-bedroom rent: $1,195
Median listing price: $413,000
5% down payment: $20,650
Months of saving for down payment: 17
Riverside-San Bernardino-Ontario, California
One-bedroom rent: $1,610
Median listing price: $475,000
5% down payment: $23,750
Months of saving for down payment: 15
San Francisco-Oakland-Hayward, California
One-bedroom rent: $2,414
Median listing price: $995,000
5% down payment: $49,750
Months of saving for down payment: 21
Seattle-Tacoma-Bellevue, Washington
One-bedroom rent: $1,657
Median listing price: $628,000
5% down payment: $31,400
Months of saving for down payment: 19
St. Louis, Missouri-Illinois
One-bedroom rent: $1,035
Median listing price: $232,000
5% down payment: $11,600
Months of saving for down payment: 11
Tampa-St. Petersburg-Clearwater, Florida
One-bedroom rent: $1,225
Median listing price: $300,000
5% down payment: $15,000
Months of saving for down payment: 12
Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia
One-bedroom rent: $1,767
Median listing price: $497,000
5% down payment: $24,850
Months of saving for down payment: 14