When considering purchasing a home, buyers must consider the full cost, from price and property taxes to home insurance and maintenance costs. Another key factor to consider is the down payment.
Point2, an international real estate search portal, released a study in early October that determined how much the down payment would cost millennials entering the housing market for the first time in the 100 biggest U.S. cities and how long it would take them to save that much.
Point2 researchers based their determination on current adjusted median household income for 25- to 40-year-olds in these cities, adjusted median home prices, and monthly savings rates.
They considered two different savings rates: 20% of income, which is the recommended saving rate, and 8%, which they said was the average household saving rate in the U.S., citing Trading Economics.
The study found that by considering savings rates, median incomes, and median home prices, the time needed to save for a 20% down payment in the 100 largest U.S. cities varies significantly, from a little more than two years in cities requiring the lowest down payments to as long as 10 years in the cities at the other end of the spectrum.
See the gallery for the 15 cities where millennials experience the shortest time to save 20% for a down payment.