Short of a cash windfall, saving for a down payment on a home can take years — and in some U.S. states, it may take decades.
A new analysis from ConsumerAffairs estimates how long it would take to save a 10% down payment in every state by comparing each state’s median household income with its median home price, along with median tax burdens and essential living costs.
In Iowa, it would take about 8.7 years to save enough for a 10% down payment, the fastest of any state. In California, the estimate is 25.1 years — longer than any other state. Across all 50 states, the average timeline is 14.4 years, according to the study.
These timelines rely on what the study calls “fractional saving,” which assumes a household sets aside 10% of its discretionary income each year.
That approach was chosen because “that’s how people really save,” Dayna Edens, media relations manager at ConsumerAffairs, tells CNBC Make It. “Nobody’s setting aside every spare penny for a down payment on a house they’re not even shopping for yet.”
A 10% down payment was also chosen over the commonly recommended 20% as a more realistic target for first-time buyers, says Edens.
Here’s a look at the 10 states where it would take the least amount of time to save up a 10% down payment on a home, based on each state’s median income, median home price and estimated household savings.
1. Iowa
- Time to save: 8.7 years
- Median annual household income: $75,501
- Median home price: $247,400
2. Ohio
- Time to save: 9.9 years
- Median annual household income: $72,212
- Median home price: $261,700
3. Texas
- Time to save: 10.3 years
- Median annual household income: $79,721
- Median home price: $339,400
4. Maryland
- Time to save: 10.3 years
- Median annual household income: $102,905
- Median home price: $439,300
5. North Dakota
- Time to save: 10.6 years
- Median annual household income: $77,871
- Median home price: $298,200
6. Kansas
- Time to save: 10.6 years
- Median annual household income: $75,514
- Median home price: $292,600
7. Oklahoma
- Time to save: 10.7 years
- Median annual household income: $66,148
- Median home price: $252,900
8. Illinois
- Time to save: 10.7 years
- Median annual household income: $83,211
- Median home price: $303,300
9. Alaska
- Time to save: 10.9 years
- Median annual household income: $95,665
- Median home price: $402,800
10. Indiana
- Time to save: 11.0 years
- Median annual household income: $71,959
- Median home price: $276,000
The key factor in affordability is home price. All but one of these states have median home prices below the national median of $410,800, per U.S. Census data.
In eight of the 10 states, median household income is roughly in line with the national median of $83,730, per U.S. Census data. The shorter timelines largely reflect lower home prices, not unusually high earnings.
That pattern holds in many higher-income states as well. In places where median household income exceeds six figures, such as California and Hawaii, the timelines tend to run longer than in states with lower-cost homes. In those states, high living costs, especially housing, can offset the advantage of higher wages.
Annual taxes and essential expenses also influence how much discretionary income households can save. Tax burdens vary by roughly $15,000 from state to state, and the annual cost of necessities ranges from the mid-$20,000s to the low-$40,000s, according to the study.
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