How long does it take to save for your down payment?

How long does it take to save for your down payment?

With rising house prices largely driven by the inventory shortage, the time it takes a potential homebuyer to save for a 20% down payment is only likely to increase going forward.

Nationwide, for a couple, it takes 4.6 years to save enough to make a 20% down payment on a home, according to a study from Zillow that combines home values and 2016 income data from the U.S. Census. It takes a single person more than double to save, an average of 10.8 years. The study uses an assumption of a consumer saving 10% of his and/or her income per year.

There are a growing number of consumers using loan programs with as little as a 3% down payment for conforming loans or 3.5% for Federal Housing Administration-insured loans. But by putting less than 20% down, the consumer is subject to mortgage insurance premiums, and in the case of FHA that is for the life of the loan.

(The Veterans Affairs-guarantee program allows for 100% financing, but only current or former service members are eligible for these loans.)

Nearly two-thirds of Americans agree that buying a home is a central part of living the American dream, but for unmarried or un-partnered Americans, that dream is increasingly out of reach. Single buyers typically have more limited budgets, which means they are likely competing for lower-priced homes that are in high demand. Having two incomes allows buyers to compete in higher-priced tiers where competition is not as stiff.”

A single person could afford to purchase only 45% of the U.S. housing stock, but a married or partnered couple could afford 82% of all homes.