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Home prices have pulled away from paychecks in every part of the country. SmartAsset found places where the wait to buy now stretches past a decade
Spenser Sembrat / Unsplash
A home down payment used to be a few years of disciplined saving. Now it's closer to a decade in large parts of the country, and the wait keeps growing even for households earning well above the median. Wages have climbed over the past ten years, but in the places people most want to live, home prices have climbed faster still, pulling the size of a typical down payment further out of reach with each year that passes. A household doesn't need a bad year to fall behind. Steady saving isn't enough either. Home prices are rising faster than paychecks, so the amount needed keeps growing before most households can save enough to reach it.
The math behind a down payment hasn't changed. Most lenders still expect 20% down to avoid extra insurance costs, so the down payment's size rises and falls with the price of the home itself. When a home's price climbs by hundreds of thousands of dollars over a decade, the down payment climbs by tens of thousands right along with it, and a household has to save far more before a lender will even discuss a mortgage. Income growth can close some of the distance, but in much of the country, pay hasn't kept pace with what homes now cost, leaving the saving period longer than it was ten years ago.
