Down Payment Dream: 7 Years to Save, But Decades in Hot Markets

AUSTIN, Texas – December 29, 2025

The journey to homeownership has become shorter but remains a marathon for many Americans. A new analysis from Realtor.com® reveals that the typical U.S. household now needs seven years to save for a down payment on a home, a significant improvement from the staggering 12-year peak reached in 2022. While this marks a welcome easing of market pressures, the timeline is still roughly double the pre-pandemic norm, underscoring a new and challenging reality for aspiring buyers.

The national average, however, conceals a deeply fractured landscape. In affordable Southern metros and military hubs, the dream of owning a home is within reach in just a few years. Conversely, in high-cost coastal cities, the same goal requires decades of disciplined saving, effectively locking out entire generations of would-be homeowners.

"Higher home prices and intensified competition have pushed typical down payments higher, at the same time that inflation and rising household expenses have reduced savings rates," said Danielle Hale, chief economist at Realtor.com®. "Although conditions have improved since 2022, today's timeline shows that saving for a home takes meaningfully longer than it did before the pandemic, especially in high-cost markets."

The Financial Squeeze: Lower Savings and Higher Hurdles

The prolonged timeline for saving is the result of two powerful economic forces working in tandem. First, the U.S. personal savings rate has struggled to recover from post-pandemic pressures. Averaging just 5.1% of income so far in 2025, it sits well below the pre-pandemic average of 6.5%, limiting the amount of cash households can set aside each month.

Second, the sheer size of the down payment has exploded. In the third quarter of 2019, before the market frenzy began, the typical buyer put down about $13,900. By the third quarter of 2025, that figure had more than doubled to an imposing $30,400. This dramatic increase reflects years of rapid home price appreciation and bidding wars that forced buyers to come to the table with more cash to be competitive.

The combination of these factors pushed the required savings time to a peak of nearly 16 years in April 2022, more than triple the norm just a few years prior. While the subsequent market cooling has provided relief, the current seven-year national average is a testament to how much the fundamental economics of buying a home have shifted.

A Tale of Two Markets: Decades of Waiting vs. Years of Opportunity

Nowhere is the housing divide more apparent than in the regional data. For buyers in America's most expensive coastal metros, the prospect of saving for a down payment is a multi-decade endeavor that can feel insurmountable.

In San Francisco, a household with a median income of $132,568 would need an astonishing 36.5 years to save for the median down payment of $245,466, assuming they save at the national average rate. The situation is nearly identical in nearby San Jose, which requires 36.2 years. The story continues down the California coast, with Los Angeles demanding 34.1 years and San Diego requiring 30.1 years of saving.

Other major metropolitan areas outside of California also present formidable barriers:

• New York-Newark-Jersey City, N.Y.-N.J.: 23.4 years
• Seattle-Tacoma-Bellevue, Wash.: 22.6 years
• Boston-Cambridge-Newton, Mass.-N.H.: 20.5 years
• Sacramento-Roseville-Folsom, Calif.: 20.2 years

"In high-cost markets, the typical down payment alone exceeds a full year of household income," noted Hannah Jones, senior economic research analyst at Realtor.com®. "That reality makes homeownership feel unattainable for many buyers, particularly younger households trying to enter the market for the first time."

In stark contrast, a different reality exists in many Southern and Midwestern cities, where a combination of more modest home prices and solid incomes creates a faster path to homeownership. In these markets, the finish line is not decades away, but often less than five years.

San Antonio, Texas, leads the nation for affordability in this metric, requiring just 1.3 years to save for the median down payment of $5,067. Virginia Beach, Virginia, another city with a strong military presence, requires only 2.0 years. The list of accessible metros includes:

• Memphis, Tenn.-Miss.-Ark.: 2.5 years
• Houston-Pasadena-The Woodlands, Texas: 3.5 years
• Birmingham, Ala.: 4.2 years
• Jacksonville, Fla.: 4.2 years
• Oklahoma City, Okla.: 4.6 years

Many of these areas, such as Virginia Beach and San Antonio, benefit from a high concentration of military personnel and veterans who utilize VA loans. These government-backed loans often allow for purchases with little or no down payment, dramatically reducing the initial cash hurdle and allowing buyers to focus their savings on closing costs and other expenses.

The First Step on a Changed Path

Despite the persistent affordability challenges, the aspiration of homeownership remains a cornerstone of the American dream for approximately three-quarters of the population. For those determined to make it a reality, the current market offers both new obstacles and unique opportunities.

For first-time buyers, recently easing rents in many parts of the country may provide a crucial window to accelerate their savings. By redirecting money that would have gone toward rent increases, they can more quickly build the necessary funds for a down payment. For repeat buyers who have already built equity, a larger down payment can be a strategic tool to reduce their future loan balance and mitigate the impact of higher mortgage rates on their monthly payments.

The report emphasizes that the journey begins with a single, consistent action. "Saving consistently, even in small amounts, is a meaningful first step toward homeownership," Jones said. "In today's market, building that financial cushion can make a real difference when buyers are ready to act."