Today, UrbanTurf will look at how millennials' appetite for city living has held them back from homeownership. A new report corroborates this theory by showing just how much the expense of renting can be a hindrance.
According to HotPads, it takes renters in the DC area 8 years and 11 months to save up for a 20 percent down payment. Nationwide, that time span is 6 years and 5 months.
With a regionwide median rent of $2,155 a month and a median income of $70,802, the average renter spends 36.5 percent of their income on housing. Naturally, higher rental costs make it more difficult to build up savings.
The analysis cites a median home value of $400,000 in the DC area, which works out to a 20 percent down payment of $80,000. For buyers who are able to secure a Federal Housing Administration loan with a 3.5 down payment, that savings time is much shorter: 1 year and 7 months.
As long as it takes to save for a down payment in the DC area, however, we can continue to find some comfort in not living in the San Jose metro area, where it takes 35 years and 10 months to save up a down payment, or the Los Angeles metro area, where it takes approximately 28 years.
HotPads used Zillow's median home value and rent statistics for the report and Census Bureau median income data. The amount of time it takes to save is based on an assumption that one will save 20 percent of their monthly income on a down payment.
This article originally published at https://dc.urbanturf.com/articles/blog/the-9-year-down-payment-wait-in-the-dc-area/14231.
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