Down Payment on the Median Home
Buyers tend to want houses, not condos. but Saving for the Down Payment Takes Up to 94 Years
The national median home sales price reached $346,800 in the last quarter, bringing the down payment to almost $70,000. However, in a nationwide survey of nearly 7,000 prospective homebuyers carried out on its listings platform last autumn, Point2 found that around 75% of home seekers had much less than the average down payment amount set aside, and 14% had no savings yet.
The 20% down payment is perilously close to a staggering $70,000. However, 30% of all survey-takers believe they would need less than $10,000, making it abundantly clear that their expectations might be sabotaging the homebuying efforts.
How Would it Take to Save a Down Payment?
- There are big differences in median income between generation groups. Gen Z and millennials make the least so it would take them longer to save.
- At the current savings rate, Gen Z buyers would need more than ten years to save enough for a down payment in 36 cities.
- It would take over 20 years in expensive cities like Los Angeles and San Jose, CA
- Irvine, CA tops the list at 94 years.
Easiest Places For Millennials to Buy a Home
Hardest Places For Millennials to Buy a Home
There are more details and interactive charts in the above link.
Note that the number of years assumes saving 17% of income, an unlikely proposition over time.
The median income for Generation Z in Irvine CA was only$11,796 vs LA at $35,400 which accounts for the unrealistic 94 years. Most likely the Gen Z crowd in Irvine are all in school.
For millennials, the median household income in Irvine skyrockets to $115,318.
The study was for the largest 100 cities.
Out of curiosity I decided to check up on Median Home Prices in Danville Illinois, my home town.
If you have a $400,000 home in Danville, IL you have one one the most expensive homes in the entire county.
Spotlight Danville, Illinois, My Home Town: Bankrupt
For more on Danville, please see Spotlight Danville, Illinois, My Home Town: Bankrupt
I grew up in Danville, Illinois, the home of Chuckles (the candy), Hyster (lift forks), Lauhoff (the world's largest grain elevator), Petersen Puritan (one of the world's largest aerosol bottling plants, think deodorant sprays), a GM foundry in adjacent Tilton, and many other industries.
All of those industries but Hyster are gone or sold to other companies. Hyster remains but production of forklifts doesn't. Lauhoff is now the Bunge corporation. Inquiring minds may be interested in the History of Chuckles, no longer made in Danville.
There are many more interesting details in the above link including why Danville is bankrupt.
Shortly before that post I was accused on Twitter by someone named "Armed Snowflake" of being "Spoon Fed With Free Stuff Like You Got From Your Wealthy Parents"
He deleted his Tweet after my response but that response is still there.
Tuition when I went to school was $500 per year,
Tuition is now about $17,000-$21,000 depending on the program.