The 7-Year Wait: Home Down Payments Get Easier, But Dream Still Distant

AUSTIN, Texas – December 29, 2025 – For millions of aspiring American homeowners, the path to purchasing a property has grown shorter, but the destination remains frustratingly far. A new analysis from Realtor.com® reveals that the typical U.S. household now needs seven years to save for a standard down payment, a dramatic improvement from the staggering 12-year peak reached during the market frenzy of 2022.

While this shortened timeline offers a glimmer of hope, it also casts a long shadow. The current seven-year waiting period is still roughly double the pre-pandemic norm, a stubborn reality shaped by higher home prices and a personal savings rate that has failed to recover to its former strength. The typical down payment itself has more than doubled since 2019, ballooning from about $13,900 to $30,400 in the third quarter of 2025.

"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 challenge is compounded by a national personal savings rate that has averaged just 5.1% in 2025, well below the 6.5% average seen before the pandemic. This financial squeeze means that even as wage growth and cooling home prices provide some relief, the fundamental barrier of the initial down payment remains a formidable hurdle for many.

A Tale of Two Housing Markets

The national average masks a deeply fractured housing landscape, creating a tale of two Americas where the dream of homeownership is either within reach or a multi-generational pursuit. The disparity is most pronounced between high-cost coastal metros and more affordable Southern and Midwestern regions.

In California's tech-fueled epicenters, the timeline stretches into decades. A typical household in the San Francisco metro area would need to save for an astonishing 36.5 years to afford the median down payment of $245,466. The situation is similarly daunting in San Jose (36.2 years), Los Angeles (34.1 years), and San Diego (30.1 years). Other coastal hubs like New York, Seattle, and Boston all require over 20 years of consistent saving.

These extreme timelines are the result of a perfect storm of economic factors. Decades of restrictive zoning policies have severely limited housing supply, creating intense competition for scarce inventory. While these cities boast high median household incomes, wage growth has been unable to keep pace with the meteoric rise in home values. The result is a market where the barrier to entry is almost insurmountable for those without existing generational wealth or significant equity from a previous home sale.

"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."

Cracking the Code: Where Homeownership is Within Reach

In stark contrast, a different story is unfolding in several Southern metros and military-centric communities. In these markets, the path to owning a home is measured in a few years, not a few decades. San Antonio, Texas, leads the nation for accessibility, with an estimated savings timeline of just 1.3 years for a median down payment of about $5,000.

Other accessible markets include Virginia Beach, Virginia (2.0 years), Memphis, Tennessee (2.5 years), and Houston, Texas (3.5 years). These areas benefit from a combination of more affordable home prices, solid income levels, and, crucially, more elastic housing supplies that can better respond to demand.

Military hubs like Virginia Beach and San Antonio have a distinct advantage: the widespread use of VA loans. Backed by the U.S. Department of Veterans Affairs, these loans allow eligible service members and veterans to purchase a home with little or no down payment. This fundamentally changes the financial equation for buyers, shifting their savings focus from a massive upfront sum to covering closing costs. Data shows that in markets like Virginia Beach, the median down payment percentage can be as low as 1.8% to 3%, a fraction of the 25% often seen in California's priciest cities.

The Squeeze on First-Time Buyers

The enduring affordability challenge is disproportionately impacting one key demographic: first-time homebuyers. According to a 2025 report from the National Association of Realtors (NAR), first-time buyers accounted for a historic low of just 21% of all home sales, a steep decline from the traditional norm of around 40%. The median age of a successful first-time buyer has also climbed to an all-time high of 40.

This demographic is caught in a financial vise. High rental costs make it difficult to accumulate savings, while significant student loan and credit card debt burdens many younger households. For the 43% of Younger Millennials carrying student loan debt, saving for a down payment becomes a secondary priority. Consequently, many who do manage to buy are increasingly reliant on outside help, with NAR data showing that a third of younger millennial buyers received down payment assistance from family or friends.

Even those who succeed are putting more skin in the game. The median down payment for first-time buyers in 2025 was 9%, matching the highest level seen since 1989. This suggests a market where only the most financially prepared or well-supported first-time buyers can compete, leaving many others on the sidelines.

Navigating the Path Forward

Despite the hurdles, a broad consensus has emerged that improving housing affordability is a national priority. For prospective buyers, navigating this market requires a proactive and informed strategy. Federal programs like FHA loans, which allow for down payments as low as 3.5%, remain a vital tool. Furthermore, 2025 saw a record number of state and local down payment assistance (DPA) programs, offering grants and low-interest loans to help bridge the savings gap.

Experts advise buyers to thoroughly research these options and focus on strengthening their financial position. Easing rents in some markets may finally provide the breathing room needed to accelerate savings.

"Saving consistently, even in small amounts, is a meaningful first step toward homeownership," said Jones. "In today's market, building that financial cushion can make a real difference when buyers are ready to act."