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