A first home can feel close when you have a savings goal and a steady plan. But the time it takes to reach that goal depends on more than how much you set aside. If home prices rise faster than incomes, while rent takes up a large share of earnings, the finish line can move farther away even as you save.
A report from the Julian Bond Institute (JBI) at the Center for Responsible Lending highlights how much that challenge has changed. Its national analysis estimates that a renter family at the median income now needs 16 years to save for a starter-home down payment and closing costs, twice the time estimated for 2019.
Quick Answer
JBI’s analysis found that the time needed for a renter family at the median income to save enough for a starter-home down payment and closing costs rose from 8 years in 2019 to 16 years. For Black aspiring homeowners, the estimate increased from 11 to 21 years, and the Black-White disparity doubled. These are modeled estimates, not a forecast or a promise about any individual household.
Knowledge Snapshot
- National analysis: JBI examined how many years a family aspiring to own a home would need to save for a starter-home down payment and closing costs.
- Median-income renter family: The estimate doubled, from 8 years in 2019 to 16 years.
- Black aspiring homeowners: The estimate rose from 11 to 21 years.
- Other groups and places: JBI also found considerable increases among frontline worker families and in the 10 largest metro areas.
- The report’s conclusion: Homeownership is largely out of reach for many people without financial help from family or friends. JBI calls for down payment assistance, low down payment mortgages, and additional housing supply.
The report summary describes a national analysis, with additional analysis of frontline workers and the 10 largest metro areas.
Distinctive Value: It Is About the Clock, Not Just the Price
The 16-year estimate is not simply a story about the price of a home. It reflects the relationship between three moving parts: home-price growth, income growth, and how much income a family can save after paying rent and other expenses.
A down payment and closing costs are usually tied to the price of a home. If that price grows faster than a household’s income, the savings target can rise faster than the amount the household can put away. If rent also absorbs a large share of income, there is less left to save toward the larger target. In that situation, the years needed to save can compound rather than increase gradually.
The down payment percentage matters, too. A higher percentage generally means a larger amount to save, while a lower down payment can reduce the upfront target. But a lower down payment does not erase the costs of buying, and it may bring other expenses, such as mortgage insurance.
The report summary does not specify the down payment percentage, starter-home price assumptions, or income-growth assumptions. It models a starter-home down payment plus closing costs, and the detailed assumptions are in the full report PDF. The estimate is useful for understanding the broader challenge, but it should not be treated as a personalized savings timeline.
What the Findings Say About the Disparity
For Black aspiring homeowners, JBI estimated that saving for the down payment and closing costs rose from 11 years in 2019 to 21 years. The report also states that the Black-White disparity between 2019 and 2026 doubled.
Those figures describe the report’s modeled estimates. They do not tell an individual household how long it will take to buy, but they show that the time burden has not increased evenly across groups. The report also identifies considerable increases for frontline worker families and families in the 10 largest metro areas.
What a Renter Can Control
No household can control home prices or the rent charged in its area. But a few decisions can affect a personal plan:
- Savings rate: Review recurring expenses and look for a sustainable amount to save regularly. Cutting spending is not always possible, especially when housing and other essentials already take most of a paycheck. For ideas on building a down payment fund, see ATMC’s home down payment savings resource.
- Where savings are held: A savings account typically offers more predictable access and less exposure to market swings. An investment account may offer growth potential, but its value can fall when you need the money. The right tradeoff depends partly on your timeline and ability to accept losses.
- Assistance and first-time buyer programs: Check local and state resources, lenders, and nonprofit housing organizations for current eligibility rules and terms. Programs vary, so confirm whether assistance is a grant, a loan, or another form of support. ATMC’s first-time homebuyer tips can help you organize questions.
- Loan options: JBI calls for low down payment mortgages as part of the broader response. These products may reduce the cash needed upfront, but mortgage insurance or tighter qualification requirements may apply.
- Location and home size: A smaller unit or a lower-cost area may bring the savings target down. Compare the potential savings with transportation costs, commute time, and how well the location fits your life.
Realistic Paths, With Tradeoffs
There is no single right response to a longer savings timeline. Each option shifts the mix of cost, flexibility, and risk:
| Possible path | Potential benefit | Tradeoff to weigh |
|---|---|---|
| Keep renting while building savings | Preserves flexibility and avoids home maintenance costs and responsibilities. | You do not build equity in a home, and rent may continue to limit how much you can save. |
| Buy in a lower-cost area or choose a smaller unit | May lower the upfront cost of buying. | A longer commute can add transportation costs, and a smaller home or different neighborhood may require lifestyle changes. |
| Pursue a higher-paying role before buying | More income could create room to save. | Waiting takes time, and changing roles can carry career and income risk. |
| Explore assistance programs and low down payment products | Could reduce the amount you need to bring to closing. | Eligibility rules can be strict; lower down payments may involve mortgage insurance or other costs. |
| Buy with a co-buyer | Two people may be able to combine resources. | Both share legal and financial risk. A written agreement should address ownership, payments, and what happens if one person wants to sell or cannot pay. |
These are options to evaluate, not recommendations. Compare the full cost of ownership, including closing costs, insurance, taxes, maintenance, and the monthly payment, with the cost and flexibility of continuing to rent.
What Not to Do to Reach the Goal Faster
- Do not drain retirement accounts without understanding the consequences. Depending on the account and circumstances, withdrawals can mean taxes or penalties and leave less money invested for retirement.
- Do not use a high-interest loan for a down payment. Borrowing can add expensive monthly payments and may affect your ability to qualify for a mortgage.
- Do not rely on an unverified “no money down” offer. Confirm the lender, program terms, fees, eligibility, and repayment obligations before signing or sharing sensitive information.
If You Feel Behind, This Is Not a Personal Failing
JBI’s conclusion that homeownership is largely out of reach for many families without help from relatives or friends is a structural observation, not a judgment about individual choices. The report points to the gap between what families can save and what buying a starter home requires. A careful plan can help you make informed decisions, but it cannot resolve that gap on its own.
The practical next step is to compare your savings capacity with the full cost of buying in places you would actually consider. Explore assistance and loan options, keep your savings accessible in a way that fits your timeline and risk tolerance, and weigh each path against your household’s needs. The goal is not to force a purchase on a deadline. It is to understand your choices and protect your financial stability while you decide.
FAQs: Saving for a First Home Now Takes 16 Years
How long does it take to save for a down payment?
It depends on the home price, down payment target, closing costs, income, and how much you can save after paying expenses. JBI’s national estimate for a renter family at the median income is 16 years for a starter-home down payment and closing costs, compared with 8 years in 2019.
Why has saving for a home gotten harder?
The amount a household needs to save can grow faster than the amount it can set aside when home prices rise faster than incomes. Rent and other expenses can further limit the share of income available for savings.
How much do I need for a down payment?
There is no single amount for every buyer. It depends on the home price, loan terms, down payment requirement, and closing costs; the report’s accessible summary does not state a specific percentage. Ask lenders about available options and compare the full upfront costs.
What down payment assistance is available?
Options and eligibility depend on location and program rules. Check with local or state housing agencies, nonprofit housing organizations, and lenders, and confirm whether assistance is a grant, a loan, or another type of support.
Should I buy a home now or keep renting?
That depends on your finances, housing needs, savings, and how long you expect to stay in an area. Compare the full costs and risks of owning with the flexibility and costs of renting rather than making the decision based on a savings timeline alone.
AskTheMoneyCoach Staff is the collective byline for our editorial team. Founded by Lynnette Khalfani-Cox, The Money Coach®, and Earl Cox, AskTheMoneyCoach.com publishes practical, research-informed guidance on credit, debt, saving, consumer protection, and everyday money decisions. Our work follows the site’s editorial standards and helps readers understand their options and make informed choices.
