How Much Time Do You Need To Save for a Down Payment?

<article class="post-2106 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2106"><span class="entry-date">April 19, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">How Much Time Do You Need To Save for a Down Payment?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=How+Much+Time+Do+You+Need+To+Save+for+a+Down+Payment%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhow-much-time-do-you-need-to-save-for-a-down-payment%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="How Much Time Do You Need To Save for a Down Payment? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142633/20210419-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142633/20210419-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142633/20210419-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>One of the biggest hurdles homebuyers face is saving for a down payment. As you’re budgeting and planning for your home purchase, you’ll want to understand how much you’ll need to put down and how long it will take you to get there. The process may actually move faster than you think.<span id="more-44208"></span></p>
<p>Using <a href="https://www.huduser.gov/portal/datasets/il/il20/Medians2020r.pdf">data</a> from the <em>U.S. Department of Housing and Urban Development</em> (HUD) and <a href="https://www.apartmentlist.com/rentonomics/rental-data/"><em>Apartment List</em></a><em>,</em> we can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median-priced home. Since saving for a down payment can be a great time to practice budgeting for housing costs, this estimate also uses the <a href="http://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp">concept</a> that a household should not pay more than 28% of their total income on monthly housing expenses.</p>
<p>According to the data, the national average for the time it would take to save for a 10% down payment is right around two and a half years (2.53). Residents in Iowa can save for a down payment the fastest, doing so in just over one year (1.31). The map below illustrates this time (in years) for each state:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142637/20210419-MEM-Eng-1.png"><img alt="How Much Time Do You Need To Save for a Down Payment? | Simplifying The Market" class="aligncenter wp-image-44211" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142637/20210419-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142637/20210419-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142637/20210419-MEM-Eng-1-400×300.png 400w" width="650"/></a></p>
<h4><strong>What if you only need to save 3%?</strong></h4>
<p>What if you’re able to take advantage of one of the 3% down payment programs available? It’s a common <a href="https://www.simplifyingthemarket.com/2021/02/03/do-i-really-need-a-20-down-payment-to-buy-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2">misconception</a> that you need a 20% down payment to buy a home, but there are actually more affordable options and down payment assistance programs available, especially for first-time buyers. The reality is, <strong>saving for a 3% down payment may not take several years</strong>. In fact, it could take less than a year in most states, as shown in the map below:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142635/20210419-MEM-Eng-2.png"><img alt="How Much Time Do You Need To Save for a Down Payment? | Simplifying The Market" class="aligncenter wp-image-44210" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142635/20210419-MEM-Eng-2.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142635/20210419-MEM-Eng-2.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/15142635/20210419-MEM-Eng-2-400×300.png 400w" width="650"/></a></p>
<h3><strong>Bottom Line</strong></h3>
<p>Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Let’s connect to explore the down payment options available in our area and how they support your plans.</p>
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