The latest numbers show there are at least four great reasons to buy:
- The average first time home buyer down payment is just 6 percent.
- Mortgage rates have been dropping since the fall of 2018, recently reaching new lows. Now’s the time to lock in an affordable rate.
- In the past 12 months, 88 percent of property managers have increased their rents.
- The average credit score for homebuyers on approved loans also keeps falling for many different loan types.
“They answered every question and concern that I had. The loan closed early with a great rate. Each deal hereafter, I’m calling them first.” – Find a local loan officer who cares about getting you home happy and fast.
How long will it take to come up with a down payment?
Based on Census, HUD, and Apartment List data, and taking into account the percentage of earnings spent on rent by state, it may take anywhere from 1.12 years to 37.46 years to save up for a 10-percent down payment.* California, unsurprisingly, is the state where down payment savings time surpasses the 30-year mark, with Kansas being the most affordable state to save.
Other states fall somewhere in the middle for average 10-percent down payment savings time, at 1.5 years in Illinois, 2.34 years in Texas, 3.47 years in Arizona, and 4.49 years in Florida.
But remember, the average homebuyer puts less than 6-percent down. And some mortgage programs that are friendly to first-time buyers have a 3.5-percent down payment minimum. With a first time home buyer down payment amount this low, savings time is shortened to far less than two to five years. It may take you just a few months to come up with around a 3-percent down payment in almost every state.
Use this trick to get home faster
If you’re having trouble putting together a down payment for your house, there’s another option that can help. Locking in a low mortgage rate today could give you the leverage you need to make your monthly mortgage payment cheaper — no matter the size of your down payment. This can be especially helpful for buyers interested in low- and no-down-payment mortgage programs. Click here to connect with a local loan officer and learn how.
*“How Quickly Can You Save Your Down Payment?” Keeping Current Matters, April 2019.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.