How long does it take to save up for a starter home? Twice as long as it did in 2019
A new analysis reveals that the time required for a median-income household to save for a starter home down payment has doubled since 2019. Rising home prices, inflation, and stagnant savings rates have made homeownership increasingly unattainable for many Americans.
Why it matters
The widening gap in housing affordability threatens the long-term financial stability and wealth-building potential of middle-income families.
Mortgage rates topping 7% is the latest sign of how hard it has gotten to buy a first house, with aspiring owners already facing sky-high prices. A new analysis out Thursday shines a light on yet another growing obstacle: the amount needed to close a home loan.
"Over the last seven years, the time to save up that down payment and closing costs has doubled," said Mike Calhoun, president of the Center for Responsible Lending, a research nonprofit that promotes economic opportunity. The report was released by the center's Julian Bond Institute .
Since 2019, the last time the center made the same calculation, home prices have shot up, inflation spiked and has remained stubbornly high, and the rising cost of food, gas, healthcare and more has strained family budgets. Closing costs on a home loan have also ticked up, driven in part by rising homeowners insurance.
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