Saving for a down payment is often viewed as the biggest hurdle for a first-time homebuyer. However, I think you’ll be suprised how ready you already are to purchase a home if we get down to the actual numbers. The days of you must have a 20% down payment are gone and there are many flexible options for purchasing with less than a 20% down payment to buy here in Denver. So, we set out to find out how long would it take you to save for a down payment in each state?
Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.
By determining the percentage of income spent renting a 2-bedroom apartment in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.
According to the data, residents in Denver can save for a down payment the quickest in just under 7 years. Below is a map created using the data for each state:
What if You Only Needed to Save 3%?
What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3% down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes attainable in two years in Colorado as shown in the map below.
Bottom Line
Whether you have just started to save for a down payment, or have been saving for years, you may be closer to your dream home than you think! Let’s meet up so I can help you evaluate your ability to buy today.
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