Here’s Where It Takes the Longest To Save for a Down Payment—and Where It’s Quickest

Saving for a down payment is a challenge for many people looking to buy a home, and one of the toughest barriers for renters who want to make the leap to ownership.

But it takes longer in some markets than others, according to a new analysis from the National Association of Realtors®.

The new study found that San Jose, CA, was the metro area where saving for a down payment took the longest, stretching 15 years for the typical buyer. Contrast that with Jackson, MI, where homeownership is within reach in two years.

The study analyzed data from the Home Mortgage Disclosure Act across more than 180 markets. Rather than assuming a typical 10% or 20% down payment, the analysis used the actual amounts buyers put down in each market, based on the median loan-to-value ratio among mortgage borrowers.

NAR then combined this with median household income and assumed households save 15% of their income annually, estimating how many years it would take to build a down payment in each market.

California markets among the toughest

Saving for a down payment is especially difficult in California markets, based on findings from NAR.

In the hardest market, San Jose, the median home value among Home Mortgage Disclosure Act borrowers is about $1.57 million. With a typical down payment of 24%, buyers need roughly $382,000 in cash. Given a median household income of around $165,000, saving 15% annually—about $24,700—would mean it takes roughly 15 years to accumulate that amount.

"It is not surprising to see San Jose at the top," NAR senior economist Nadia Evangelou tells Realtor.com®. "When the down payment alone is close to $400K, it can take well over a decade to save, even with strong incomes."

But that's a sacrifice many buyers are willing to make.

"San Jose is so expensive because a deep pool of high-earning tech buyers are all competing over a very limited number of homes," Alexander Kalla, a real estate agent at KW Bay Area Estates, tells Realtor.com. "Santa Clara County remains a global tech hub, and high-income households want to live close to those job centers, which keeps demand for ownership housing strong even as rates and prices rise."

The timeline is similar in Los Angeles and San Luis Obispo at about 14 years, and slightly shorter in San Francisco, Salinas, San Diego, and Santa Barbara at around 12 years.

"Saving for a down payment on an average home in Los Angeles is a monumental undertaking for the average person," Jameson Tyler Drew, president of Anubis Properties in the L.A. area, tells Realtor.com. "The buyers I see coming through this door are more often either DINKS (dual income no kids), or first-time homebuyers whose parents or grandparents are helping with the down payment. The average salaried employee pulling in $50K to $75K a year just simply cannot scrape together enough, especially with skyrocketing gas and food prices."

Markets with moderate timelines

In contrast to coastal California, Sun Belt markets are much quicker when it comes to saving for a down payment, according to NAR.

In places like Phoenix, Nashville, Denver, and Orlando, saving for a down payment takes about seven years.

"That is still a long time, but it is about half the time of the toughest California markets," says Evangelou.

Even so, it still represents a significant hurdle for many buyers.

"Even though Orlando is more affordable than many other cities in Florida, it still takes years for many buyers to save enough for a down payment," real estate agent and investor Ron Myers of Ron Buys Florida Homes tells Realtor.com. "Many people can handle the monthly payment, but they get stuck when trying to come up with the cash upfront."

Evangelou says most markets fall in the middle of the pack, with savings timelines typically ranging from four to seven years.

Cities such as Raleigh, Charlotte, Indianapolis, Kansas City, Columbus, and Minneapolis typically fall within the four- to six-year range.

Minnesota real estate agent Brian Durham of WeGo Real Estate tells Realtor.com, "Building up that initial lump sum while keeping up with rent and everyday expenses is not impossible, but it can take intentional planning and, in a lot of cases, a shift in how people think about getting into a home."

Similarly, Atlanta, Dallas, Houston, Washington, DC, and Austin generally fall in the five- to six-year range.

"For buyers with the flexibility to choose among major metros, the difference between a 12-year market and a five-year market is seven years," says Evangelou. "This can also mean seven years of rent payments that could have been building equity; seven years of accumulated homeownership wealth that are missing."

Where the path to a down payment is shorter

Evangelou tells Realtor.com that there are markets where buyers can save for a down payment in as little as two to three years.

"These are usually more affordable markets where the down payment is much smaller relative to local incomes," she says.

The easiest market is Jackson, MI, where the median home value among Home Mortgage Disclosure Act borrowers is about $217,000. With a typical down payment of 7%, buyers need roughly $16,080 in cash. Given a median household income of around $66,073, saving 15% annually would mean it takes roughly two years to accumulate that amount.

"Many of these affordable markets are in the Midwest, like Davenport, IA; Toledo and Canton, OH; Peoria, and Springfield, IL," says Evangelou.

Even though saving for a down payment in these markets is more attainable, reaching those milestones often requires intentional trade-offs and creative strategies.

Myers says, "Some creative saving methods I have seen include living with family longer, pooling money with a spouse or partner, cutting back hard on extra spending, or using gift funds from family."