Study: Assuming 5% down, adults in two Fla. metros could save enough in one year to buy a house if they A) move back home, and B) save all the unneeded rent money.
SANTA CLARA, Calif. – For the record number of working young adults who moved back home during the pandemic, homeownership may be more attainable than they think, according to a new report released by realtor.com.
For someone paying a median one-bedroom rent of $1,533, it would take 11 months to save $17,000 – a 5% down payment for a $340,000 home, the median-priced home in the U.S. For the analysis, realtor.com looked at the nation’s 20 largest metros, including two in Florida.
Across the 20 largest metros, it would take longer (average 15 months) to save for a 5% down payment based on home prices and rent savings in each market. It’s fastest to save for a 5% down payment in Chicago, for example, followed by Philadelphia and St. Louis. But it takes the greatest amount of time in California metros Los Angeles, San Francisco and San Diego.
In the two Florida metros cited in the study, it would take one year (12 months) to save enough money for a down payment:
In Miami-Fort Lauderdale-West Palm Beach, a one-bedroom apartment rents for a median of $1,691 per month, and the median price for a new home is $409,000, according to realtor.com. A 5% down payment would be $20,450, which would take a living-at-home adult one year to save.
In Tampa-St. Petersburg-Clearwater, a one-bedroom apartment median price is $1,225, and the median price of a home is $300,000. At $15,000 down, it would also take 12 months to save enough via unneeded rent payments.
“Although many members of the millennial and Gen Z generations were forced to move home because they lost their jobs in 2020, others chose to forgo their rental because they had the opportunity to work remotely and preferred to wait out the pandemic with family,” says realtor.com Chief Economist Danielle Hale. “For those who have been able to channel their would-be rent into savings, the pandemic’s silver lining could be becoming a homeowner sooner than they otherwise would have.”
To calculate down payment savings, realtor.com analyzed listing and rental data from December 2020. The national median down payment was 5% in December.
© 2020 Florida Realtors®. Reprinted with permission Florida Realtors. All rights reserved.
