10 Least Affordable Down Payment Cities in the US — and 10 Much Cheaper Options
Buying a home — likely the biggest purchase you will ever make — is a huge commitment that can be thrilling and distressing in equal measure.
As we close out an economically difficult 2022, the housing market has shifted from a rough inflation situation to a deflation cycle. Corrected by the Federal Reserve’s persistent interest rate hikes, U.S. home prices have declined for four consecutive months, per Fortune.
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But house prices and mortgage rates are still high and the years prospective homebuyers have to wait to save enough for a down payment is rising every year.
SmartAsset’s annual “Years of Work Needed to Afford a Down Payment” report has once again broken down how long it will take first-time homebuyers to save for the standard 20% down payment in the 50 largest cities in the U.S. Assuming a 20% wage save every year, SmartAsset used 2021 median home values and median household income to rank the cities where it takes the longest to collect a down payment.
Because many Americans opt for paying down less than the recommended 20% on houses (despite the threat of having to pay mortgage insurance premiums), the study has provided the period of time required to work to afford a 12% down payment as well. Take a look.
Here’s where it takes the longest for an average household to save for a down payment:
1. Los Angeles, California
- Median home value: $812,800
- Median household income: $70,372
- Years of work to afford 12% down: 6.93
- Years of work to afford 20% down: 11.55
2. San Francisco, California
- Median home value: $1,306,400
- Median household income: $121,826
- Years of work to afford 12% down: 6.43
- Years of work to afford 20% down: 10.72
3. Oakland, California
- Median home value: $848,600
- Median household income: $82,236
- Years of work to afford 12% down: 6.19
- Years of work to afford 20% down: 10.32
4. New York City, New York
- Median home value: $685,700
- Median household income: $67,997
- Years of work to afford 12% down: 6.05
- Years of work to afford 20% down: 10.08
5. Long Beach, California
- Median home value: $693,600
- Median household income: $73,905
- Years of work to afford 12% down: 5.63
- Years of work to afford 20% down: 9.39
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6. San Jose, California
- Median home value: $1,119,500
- Median household income: $126,377
- Years of work to afford 12% down: 5.32
- Years of work to afford 20% down: 8.86
7. Miami, Florida
- Median home value: $411,300
- Median household income: $48,789
- Years of work to afford 12% down: 5.06
- Years of work to afford 20% down: 8.43
8. Boston, Massachusetts
- Median home value: $659,700
- Median household income: $79,283
- Years of work to afford 12% down: 4.99
- Years of work to afford 20% down: 8.32
9. San Diego, California
- Median home value: $768,800
- Median household income: $93,042
- Years of work to afford 12% down: 4.96
- Years of work to afford 20% down: 8.26
10. Seattle, Washington
- Median home value: $848,100
- Median household income: $110,781
- Years of work to afford 12% down: 4.59
- Years of work to afford 20% down: 7.66
As the figures show, California markets rule the top ten with six entries: Los Angeles, San Francisco, Oakland, Long Beach, San Jose and San Diego. San Francisco might be the most expensive city in America (medium home value = $1,306,800), but prospective Los Angeles homeowners will need almost 12 years to afford a down payment due to a lower median household income ($70,372).
As you scroll down SmartAsset’s rankings, you’ll see that it takes less time in Midwestern and Southern cities to gather the necessary funds for a down payment. Check it out below.
These 10 U.S. cities have the shortest wait times to afford a down payment:
41. Milwaukee, Wisconsin
- Median home value: $160,100
- Median household income: $46,637
- Years of work to afford 12% down: 2.06
- Years of work to afford 20% down: 3.43
42. Tulsa, Oklahoma
- Median home value: $172,000
- Median household income: $51,008
- Years of work to afford 12% down: 2.02
- Years of work to afford 20% down: 3.37
43. Omaha, Nebraska
- Median home value: $211,900
- Median household income: $62,948
- Years of work to afford 12% down: 2.02
- Years of work to afford 20% down: 3.37
44. Kansas City, Missouri
- Median home value: $213,400
- Median household income: $63,396
- Years of work to afford 12% down: 2.02
- Years of work to afford 20% down: 3.37
45. Indianapolis, Indiana
- Median home value: $188,700
- Median household income: $58,479
- Years of work to afford 12% down: 1.94
- Years of work to afford 20% down: 3.23
46. Oklahoma City, Oklahoma
- Median home value: $190,900
- Median household income: $59,214
- Years of work to afford 12% down: 1.93
- Years of work to afford 20% down: 3.22
47. Memphis, Tennessee
- Median home value: $142,800
- Median household income: $44,317
- Years of work to afford 12% down: 1.93
- Years of work to afford 20% down: 3.22
48. El Paso, Texas
- Median home value: $152,800
- Median household income: $51,241
- Years of work to afford 12% down: 1.79
- Years of work to afford 20% down: 2.98
49. Wichita, Kansas
- Median home value: $165,700
- Median household income: $56,293
- Years of work to afford 12% down: 1.77
- Years of work to afford 20% down: 2.94
50. Detroit, Michigan
- Median home value: $69,300
- Median household income: $36,140
- Years of work to afford 12% down: 1.15
- Years of work to afford 20% down: 1.92
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