SEATTLE, Aug. 20, 2018 /PRNewswire/ -- Saving for a down payment is one of the biggest hurdles to homeownership. However, a new analysis from RealEstate.com, a Zillow Group® brand, identifies 10 metros where first-time buyers may find it easier to save for their future home purchase, and 10 metros where it may be more difficultⁱ.

In Chicago, a first-time buyer will need about three years to save a 20 percent down payment on the typical starter home – the fastest of the 35 metros analyzed. First-time buyers in Dallas, Detroit and Baltimore may also find saving for a down payment to take less time than in other metros – with the average millennial household needing just under four years to reach a down payment.

RealEstate.com's analysis factored in the median household income among millennials (ages 24-36) and their estimated annual household savings to determine how long it would take to save for a 20 percent down payment on starter home -- or a home priced within the bottom third of the market.

Since nearly half (44 percent) of buyers move outside of their current city with their home purchase, knowing which metros can help ease some of the down payment burden can be valuable for first-time buyers considering movingⁱⁱ. 

In Portland, Ore., the estimated annual savings for a millennial household is $5,288 – nearly half of what it is in Chicago ($10,821). Less savings combined with higher home values means a first-time buyer in Portland would need to save for more than 13 years to reach a 20 percent down payment on a starter home – the longest of the metros analyzed. In Denver, San Jose, Calif., and Riverside, Calif., it would take more than 10 years to save a down payment.

While not everyone chooses to put down 20 percent on a home, it is a good goal to aim for, especially for a first-time buyer. According to Zillow Group's 2017 Consumer Housing Trends Report, 37 percent of first-time buyers (45 percent of all buyers) choose to put 20 percent down or more on their home purchase.  

"Contrary to popular belief, millennials want to buy homes, but high home prices, low inventory and stagnant wage growth are some of the many factors that may be driving would-be buyers into delaying homeownership," says Justin LaJoie, RealEstate.com General Manager. "However, in certain U.S. housing markets first-time buyers can find some relief; they just need to know where to look."

To help first-time buyers better understand the total cost of homeownership, RealEstate.com allows home shoppers to search based on homes' "All-In Monthly Price," which includes estimates for costs such as mortgage, property tax and utilities, giving them a more accurate picture of the cost of homeownership.

Markets where first-time buyers can save for a down payment the fastest:

Markets where it takes first-time buyers longer to save for a down payment:

About Zillow Group

Zillow Group, Inc. (NASDAQ:Z) (NASDAQ:ZG) houses a portfolio of the largest real estate and home-related brands on mobile and the web, which focus on all stages of the home lifecycle: renting, buying, selling and financing. Zillow Group is committed to empowering consumers with unparalleled data, inspiration and knowledge around homes, and connecting them with great real estate professionals. The Zillow Group portfolio of consumer brands includes real estate and rental marketplaces Zillow®, Trulia®, StreetEasy®, HotPads®, Naked Apartments®, RealEstate.com and Out East®. In addition, Zillow Group provides a comprehensive suite of marketing software and technology solutions to help real estate professionals maximize business opportunities and connect with millions of consumers. The Zillow Offers™ marketplace provides homeowners with the opportunity to receive offers from buyers, including Zillow in some metropolitan areas. When Zillow buys a home, it will make necessary updates and list the home for resale on the open market. The company operates a number of business brands for real estate, rental and mortgage professionals, including Mortech®, dotloop®, Bridge Interactive® and New Home Feed®. The company is headquartered in Seattle.

Zillow, Mortech, Bridge Interactive, StreetEasy, HotPads, Out East and New Home Feed are registered trademarks of Zillow, Inc. Zillow Offers is a trademark of Zillow, Inc. Trulia is a registered trademark of Trulia, LLC. dotloop is a registered trademark of DotLoop, LLC. Naked Apartments is a registered trademark of Naked Apartments, LLC.

ⁱ RealEstate.com estimated the income of employed young adult renters using data from the U.S. Census Bureau's 2016 American Community Survey, updating incomes through 2018 Q1 using data from the Bureau of Labor Statistics' Current Employment Statistics. Savings rates for renters were then applied based on data collected as part of the March 2018 Zillow Group Housing Aspirations Report to estimate how much renters save each year. Assuming that a first-time buyer is searching for a home in the bottom third of the home value distribution and puts 20 percent of the home's value as a down payment, RealEstate.com then calculated how long it would take to save for the down payment.
ⁱⁱ According to Zillow Group Consumer Housing Trends Report 2017.

SOURCE Zillow Group, Inc.