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July 9, 2021

Study: Avg. renter would need 9 yrs. to save for down payment in Hartford market

Photo | Pixabay
By Zachary Vasile

The average first-time homebuyer would have to save for almost a decade to afford a 20% down payment on a starter home in the Hartford area, according to a new study from online real estate marketplace Zillow.

The company’s analysis found that a typical renter putting away 10% of his or her income would have to wait 9.1 years before they could afford a 20% down payment on an average starter home in the region, which Zillow estimated would cost around $189,500. That’s substantially more than the U.S. as a whole, where the savings period shrinks to 6.4 years to afford a similarly-sized down payment on a $148,500 home.

With the housing market as hot as it’s been in recent memory, starter home prices are rising almost seven times faster than renter incomes, the study noted, making it increasingly difficult for many Americans to save up for a down payment. At this rate, renters will need to save an additional $369 per month just to keep up with the forecasted growth in home values.

Prospective buyers do have low mortgage rates on their side, however, and some conventional mortgages allow for a down payment as small as 5%, Zillow analysts said.

The Hartford market turned out to be better for buyers than nearby metropolitan areas. According to the study, it would take 11.7 years of savings to secure a home in the New York City area, 13 years in Boston and 14.1 years in Providence.

Midwestern and Southern locales led the nation in affordability, with Zillow estimating that it would take about five years for a renter to sock away enough money for a 20% down payment in Detroit, Pittsburgh, Cleveland, Memphis or Birmingham, Alabama.

On the other side of the spectrum were major coastal cities such as San Diego (17.9 years), Los Angeles (17.6 years), San Francisco (17.4 years) and San Jose, California (16.6 years).
 

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