One of the biggest hurdles homebuyers face is saving for a down payment. As you’re budgeting and planning for your home purchase, you’ll want to understand how much you’ll need to put down and how long it will take you to get there. The process may actually move faster than you think.
Using data from the U.S. Department of Housing and Urban Development (HUD) and Apartment List, we can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median-priced home. Since saving for a down payment can be a great time to practice budgeting for housing costs, this estimate also uses the concept that a household should not pay more than 28% of their total income on monthly housing expenses.
What if you’re able to take advantage of one of the 3% down payment programs available? It’s a common misconception that you need a 20% down payment to buy a home, but there are actually more affordable options and down payment assistance programs available, especially for first-time buyers. The reality is, saving for a 3% down payment may not take several years.
Some Texas cities come in below the U.S. average, and Houston clocks in with the least amount of time needed to save for a 20 percent down payment in the state: 6.2 years.
Although six years may seem like a while, the plus side is that Houston residents have it easier than Austinites when it comes to buying a home. The average amount of time it takes to save for a down payment in Austin is a whopping 7.9 years, almost a year above the U.S. average.
Out of all the big Texas cities, the median home value in Houston has increased the least over the past 20 years, 78 percent, while the median income has increased by 53.5 percent. If you’re extremely eager to buy a house in the shortest amount of time possible, Houston might be the place to do it.
From 1998 to 2018, the median home value there increased by 90.9 percent, while median income went up by 70.5 percent.
Buying a home is a dream for most people but it takes time. When you get that down payment saved call us at Meadows Property Group! We will make that dream a reality!