Stock Groups

Buying a Home in the U.S. Will Take an Extra Year of Saving Up By Bloomberg


© Bloomberg. California Homes.

(Bloomberg). Considering the price rises of the pandemic era, potential homebuyers will need to put aside an additional year to make the purchase.

According to Tomo’s real-estate startup, the average American would need to save 10% each month to make enough money to pay 20%. This is a significant increase from the seven years prior to Covid-19 which triggered a frenzy of homebuying.  

Many renters who want to buy a home have struggled with saving enough money for a downpayment. As a result of tight inventory and bidding wars, prices are becoming more difficult to reach. Last month’s 29% decline in existing home purchases by first-time purchasers was the lowest since 2019, according to the National Association of Realtors. 

The people who save for a down payment “are the people who can,” Skylar Olsen, chief economist at Tomo, said in an interview. “Folks who have a lot of rent burdens tend to save nothing, and there’s always a fairly sizable share of the population who have a pretty substantial rent burden.”

The areas with the highest years-to-save time lines are Los Angeles, with 19.2, San Francisco, with 17.9 and San Jose, with 18.2, according to the Tomo study. It would take New Yorkers 11.9 years to pay down a downpayment.

©2021 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs include futures, stocks, indexes and Forex. Prices are provided not by the exchanges but by market makers. Therefore, prices can be inaccurate and differ from actual market prices. These prices should not be used for trading. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.