Report: It takes 10.5 years to save for a down payment in Boston

In San Jose, Calif, it takes a whopping 21.8 years to save enough for a 20 percent down payment.

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October 24, 2018

2 minutes to read

In takes 7.2 years to save for a down payment on a typical home in the United States, according to a report Zillow released on Monday.

But it takes 10.5 years in Greater Boston.

That figure is based on a 20 percent down payment with someone putting 10 percent each month in their savings account.

Back in 1998, the real estate website reported, the typical home in Greater Boston was worth $175,400, and it took seven years to save for a 20 percent down payment. Since then, home values have increased 159.7 percent, while incomes have grown 72.8 percent. (The Boston metro area, according to Zillow, includes Suffolk, Middlesex, Plymouth, and Norfolk counties, in addition to Strafford and Rockingham counties in southern New Hampshire.)

It’s easiest to save for a down payment in Pittsburgh (4.8 years), according to the report, but in San Jose, Calif., it takes a whopping 21.8 years. The median home value there is $1,287,600, and the median household income is $118,061.

Metropolitan Area	Years to Save, Q2 1998	Years to Save, Q2 2018	Income Change, 1998-2018	Home Value Change, 1998-2018
United States	5.5	7.2	52.6%	98.6%
New York City	7.2	11.4	57.4%	147.9%
Los Angeles-Long Beach-Anaheim, Calif.	8.7	18.4	62.5%	244.5%
Chicago	5.7	6.4	43.4%	60.8%
Dallas-Fort Worth	5.4	6.8	50.4%	90.2%
Philadelphia	4.8	6.6	50.0%	104.8%
Houston,	5.3	6.2	53.5%	78%
Washington, D.C.	5.4	7.9	72.9%	152.7%
Miami-Fort Lauderdale	5.3	10.1	43.3%	172.4%
Atlanta	4.9	6.2	36.4%	71.5%
Boston	7	10.5	72.8%	159.7%
San Francisco	10	18.3	92.8%	252.9%
Detroit	4.9	5.3	25.2%	34.0%
Riverside, Calif.	6.4	11.5	56.9%	182.5%
Phoenix	5.8	8.2	48.8%	111.7%
Seattle	7.4	11.7	76.2%	177.3%
Minneapolis-St Paul	4.7	6.8	52.6%	121.6%
San Diego	8.6	15.4	76.9%	217.4%
St. Louis	4.5	5.1	47.8%	69.5%
Tampa	4.6	7.6	53.3%	156.1%
Baltimore	5.2	6.5	72.5%	114.2%
Denver	6.4	10.3	63.7%	165.3%
Pittsburgh	3.8	4.8	66.7%	111.8%
Portland, Ore.	7	10.6	66.1%	152.3%
Charlotte, N.C.	5	6.2	48%	83.8%
Sacramento	6.9	11.7	60.4%	174.6%
San Antonio	5.4	6.3	61.3%	87.4%
Orlando	5.1	8.2	40%	128%
Cincinnati	4.9	5.1	49.7%	54.6%
Cleveland	5.5	5.2	34.3%	26.8%
Kansas City, Mo.	4.7	5.6	47.7%	76.6%
Las Vegas	6.2	9.2	35.8%	100.8%
Columbus, Ohio	5.3	5.8	50.9%	65.3%
Indianapolis	5.5	5.1	37.6%	28.5%
San Jose, Calif.	10.6	21.8	93.3%	295.9%
Austin, Texas	7	7.9	70.5%	90.9%

“It hasn’t taken this long to save for a down payment since early 2008, shortly after home values hit their highest point during the mid-2000s housing bubble,” Zillow said in a news release.

“The simple fact that home values have far outpaced income growth, lengthening the time needed to save for a down payment, contributes to millennials’ struggles to enter homeownership,” said Skylar Olsen, Zillow’s director of economic research and outreach. “Saving up for a down payment can be tough, especially when the cost of everyday life outpaces the money you put into the bank. It requires good budgeting and long-term planning. It’s one reason why more and more first-time home buyers are looking to family and friends for financial help when coming up with their down payment.”

“Slower rent growth in recent months should create some more breathing space in renters’ budgets, but rents remain high by historic standards,” Olsen added. “Even if you don’t have plans to buy a home in the next year or two, it’s not a bad idea to start setting aside savings for a future home purchase. It’s also important to remember that there are many options for mortgages requiring less than 20 percent down.”

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