SAVING FOR A DOWN PAYMENT
Saving for a Down Payment Takes Less Time
Saving for a down payment remains one of the biggest obstacles to homeownership, but recent data shows meaningful progress. In 2025, the typical U.S. household needed about seven years to save for a standard down payment, according to a new analysis from Realtor.com.
That marks a significant improvement from 2022, when the timeline peaked at roughly 12 years, driven by rapid home price growth and intense competition. While conditions have improved, today’s timeline is still about double the pre-pandemic norm, highlighting ongoing affordability challenges.
Why Saving Still Takes Longer Than Before
Despite cooling price growth, several factors continue to slow savings:
-
Higher home prices have pushed typical down payments higher
-
Lower personal savings rates limit how quickly households can set money aside
-
Inflation and rising household expenses reduce available cash flow
The U.S. personal savings rate averaged 5.1% of income in 2025, below the pre-pandemic average of 6.5%.
In 2019, the typical down payment was about $13,900. By 2025, that figure more than doubled to $30,400, significantly extending saving timelines despite recent improvements.
High-Cost Markets Still Present Major Barriers
In many high-cost coastal and urban metros, saving for a down payment can take 20 to more than 35 years, effectively pricing out many first-time and moderate-income buyers.
In some markets, the required down payment alone exceeds a full year of household income, making homeownership feel out of reach—especially for younger buyers.
Where Saving Is Faster
In contrast, many Southern metros and regions with strong VA loan usage offer faster paths to homeownership. In these areas:
-
Down payments are typically smaller
-
Household incomes remain relatively strong
-
VA loans may allow little or no down payment
Military hubs, in particular, benefit from financing options that shift the focus from large upfront savings to manageable closing costs.
Small Steps Still Matter
While affordability remains a challenge, homeownership continues to be a key goal for many Americans. Easing rents may help first-time buyers increase savings, while repeat buyers can use accumulated funds to offset higher mortgage payments.
Consistent saving—even in modest amounts—remains a critical first step. Building a financial cushion today can make a meaningful difference when buyers are ready to act.
