Young adults ‘boomerang’ to get cash for home

Saving for a down payment is one of the biggest barriers to homeownership. For the record number of young adults moved back home during the pandemic fortunate to still have a job, homeownership may be more attainable than they think, according to a new report released today by®.

For someone paying the U.S. median one-bedroom rent of $1,533, it would take 11 months to save $17,000, a 5% down payment for a $340,000 home, the median-priced home in the U.S., according to a analysis of listing and rental data for the U.S. and the nation’s 20 largest metros in December 2020.

Across the 20 largest metros,  it would take longer, an average of 15 months in order to save up for a 5% down payment based on home prices and rent savings in each market. It’s fastest to save for a 5% down payment in Chicago followed by Philadelphia, and St. Louis, while it takes the longest amount of time in Los Angeles, San Francisco, and San Diego.

“Although many members of the millennial and Gen Z generations were forced to move home because they lost their jobs in 2020, others chose to forgo their rental  because they had the opportunity to work remotely and preferred to wait out the pandemic with family,” said® Chief Economist Danielle Hale. “For those who have been able to channel their would-be rent into savings, the pandemic’s silver lining could be becoming a homeowner sooner than they otherwise would have.”

In Chicago, based on the median rent for a one-bedroom apartment of $1,521, it would take 11 months to save $16,350, a 5% down payment on the median list price home of $327,000.  At the opposite end of the spectrum, in Los Angeles, where the median list price for a home is just under $1 million and the median one-bedroom rent is $2,250, it would take 22 months to save for a 5% down payment of $50,000.

Months of Rent Needed to Save for a Typical Down Payment (20 largest metros)

Metro Areas1-bed
Months of
Saving for
Atlanta-Sandy Springs-Roswell, Ga.$1,310$350,000$17,50013
Boston-Cambridge-Newton, Mass.-N.H$2,109$649,000$32,45015
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.$1,521$327,000$16,35011
Dallas-Fort Worth-Arlington, Texas$1,125$354,000$17,70016
Denver-Aurora-Lakewood, Colo.$1,495$533,000$26,65018
Detroit-Warren-Dearborn, Mich.$970$252,000$12,60013
Houston-The Woodlands-Sugar Land, Texas$1,060$330,000$16,50016
Los Angeles-Long Beach-Anaheim, Calif.$2,250$999,000$49,95022
Miami-Fort Lauderdale-West Palm Beach, Fla.$1,691$409,000$20,45012
Minneapolis-St. Paul-Bloomington, Minn.-Wis.$1,358$344,000$17,20013
New York-Newark-Jersey City, N.Y.-N.J.-Pa.$2,345$627,000$31,35013
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md$1,495$327,000$16,35011
Phoenix-Mesa-Scottsdale, Ariz.$1,195$413,000$20,65017
Riverside-San Bernardino-Ontario, Calif.$1,610$475,000$23,75015
San Diego-Carlsbad, Calif.$2,000$797,000$39,85020
San Francisco-Oakland-Hayward, Calif.$2,414$995,000$49,75021
Seattle-Tacoma-Bellevue, Wash.$1,657$628,000$31,40019
St. Louis, Mo.-Ill.$1,035$232,000$11,60011
Tampa-St. Petersburg-Clearwater, Fla.$1,225$300,000$15,00012
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.$1,767$497,000$24,85014

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *