For would-be homeowners, the American dream comes with dramatically different savings timelines depending on location: about three years in Warren, Michigan, but more than six decades in New York City.
A new analysis estimates that a typical household in Warren could accumulate the median down payment for a first-time buyer in roughly three years. In Detroit, the same goal would take close to four years.
New York City ranks as the most challenging major U.S. market for first-time buyers saving for a home. The typical household would need more than 65 years to reach the market’s $265,000 median down payment.
San Francisco follows closely, with an estimated 57-year savings period for a $400,000 median down payment. In Los Angeles, buyers would need about 41.5 years to save the typical $170,500 deposit.
The stark difference reflects more than the price of housing. First-time buyers in the most expensive cities are also making substantially larger down payments: about 30 percent of the purchase price in New York, compared with roughly 5 percent in Detroit and Warren.
‘The time it takes to save up a down payment varies enormously by market,’ said Redfin’s head of economic research Chen Zhao.
The figures were produced in a Rocket analysis that assumes households save 5 percent of their annual income. Researchers used first-time buyer mortgage data alongside income figures from the 2024 Census.
The outlook is considerably brighter in more affordable markets. Virginia Beach, Fort Worth and Indianapolis each have estimated savings timelines of about 4.3 to 4.4 years. Milwaukee comes in at 4.4 years, followed by Jacksonville at 4.7 years.
The findings underscore the enormous geographic divide in the U.S. housing market. In much of the Midwest, aspiring buyers face far smaller upfront costs than households trying to purchase in some of the nation’s priciest coastal cities.
The findings underscore the enormous geographic divide in the U.S. housing market, with Midwestern buyers facing far smaller upfront costs than households in some of the nation’s priciest coastal cities
Redfin’s head of economic research Chen Zhao
In Warren, the median down payment for a first-time buyer is just $8,797, equal to 5 percent of an implied home price of $175,940.
Detroit is similarly accessible in terms of the upfront payment, with a median deposit of $7,600 on an implied $152,000 home. However, the city’s median household income is significantly lower, at $39,209.
Virginia Beach ranks next, at an estimated 4.3 years. First-time buyers there make a median down payment of $20,450, or 6.3 percent of an implied purchase price of $323,993.
Fort Worth and Indianapolis follow at 4.3 and 4.4 years, respectively. Their median first-time buyer deposits are $17,867 and $14,600.
The remaining cities in the 10 fastest markets include Milwaukee, Jacksonville, Cleveland, Columbus and West Palm Beach. Estimated savings periods in those locations range from 4.4 to 5.3 years.
In New York, the $265,000 median down payment amounts to roughly 30 percent of the implied $883,333 purchase price for a first-time buyer.
San Francisco demands an even larger sum in dollar terms. Its $400,000 median down payment represents about 27 percent of an implied $1.5 million home price.
Boston’s estimated savings timeline is 37.8 years, while Anaheim and San Jose each require about 33.6 years.
New York’s $265,000 median down payment represents roughly 30 percent of the implied $883,333 purchase price for first-time buyers
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San Francisco is even more expensive in absolute terms, with a $400,000 median down payment representing about 27 percent of an implied $1.5 million home
Rocket’s chief business officer Bill Banfield
Rocket’s analysis suggests the size of the deposit itself is a major part of the problem because larger down payments can be necessary on expensive properties to reduce the mortgage enough for the monthly payment to fit within a lender’s debt-to-income requirements.
‘Local home prices are driven by local incomes,’ said Zhao. ‘In more affordable markets, buyers can accumulate a down payment much faster because home prices – and therefore down payment requirements – are significantly lower.’
Rocket’s chief business officer Bill Banfield said prospective buyers should understand the typical deposit required in their local market rather than assuming they need to save 20 percent.
‘For anyone hoping to own a home someday, it’s never too early to understand what buyers are putting down in your market and start building a plan,’ said Banfield.
Many first-time buyers are surprised to learn they may qualify for programs that make homeownership more affordable.
‘Our analysis found that down payments as low as 5 percent to 6 percent are common for conventional loans in some affordable markets,’ said Banfield.
That difference is particularly visible in Detroit, where Redfin premier agent Anne Loehr said most of the first-time buyers she works with put down 5 percent.
In New York, meanwhile, Redfin agent Jason Warner said he is increasingly working with first-time buyers in their late 30s and early 40s after years of renting, while high deposits can also strengthen a buyer’s position with sellers.
In Detroit, most first-time buyers put down 5 percent on a home purchase
Redfin’s analysis found that down payments as low as 5 percent to 6 percent are common for conventional loans in some affordable markets
‘The price point is so much higher in New York City than it is in most of the country. Since it takes a bit longer for first-time home buyers to save here, I’m now often helping mid-career professionals in their late 30s and early 40s to buy their first home after decades of renting,’ Warner said.
The affordability challenge does not end once a buyer has saved the deposit, either.
Additional closing costs and prepaids can add thousands of dollars to the cash needed to complete a purchase, while higher mortgage rates can force buyers to put down even more money to keep monthly payments manageable.
Redfin’s research estimates that a median-income household would need roughly $159,000 in cash to buy the typical US home while keeping estimated monthly housing costs below 28 percent of gross income.
That figure could fall to about $144,000 if an eligible seller contribution covered certain closing expenses, but such credits cannot generally be used to satisfy the required down payment.
For buyers in the most expensive markets, the scale becomes even more striking: In San Jose, the analysis estimates that a median-income household would need roughly $1.15 million down to bring the monthly payment on a typical $1.53 million home below the 28 percent threshold.
And mortgage rates can push the hurdle higher still: using a 7.2 percent rate scenario, the national analysis estimates the total cash requirement would rise to about $170,800 without seller assistance, compared with roughly $159,000 under the August assumptions.
The figures illustrate why where a first-time buyer chooses to live can fundamentally alter the amount of time needed to build a deposit – from just a few years in Warren and Detroit to decades in New York, San Francisco and Los Angeles.