When my wife and I moved to the Dallas area 30 years ago, we resigned ourselves to renting for the long term. We’d heard our parents complain about homeownership for years.
What hope did we have, especially in the big city?
But with dozens of homebuilders putting up subdivisions in all corners of the D-FW suburbs, and interest rates about half of what they were 10 years earlier, we started focusing on a down payment.
To our surprise, we were able to build a starter home with a modest down payment. Three decades later, it’s still somewhat reasonable to save up for a down payment, according to a new study by RENTCafé. Given the low inventory and record prices, first-time buyers had additional obstacles.
The Dallas-Fort Worth market is the most permissive in Texas when it comes to saving for a down payment. A two-person family who earns just over $82,000 can afford a 20 percent downpayment in three years and 11 months, according to the study.
The overheated Austin-Round Rock area is a close second, taking four years and one month — which is understandable when considering D-FW starter homes average $221,000 and Austin-Round Rock starter homes go for $368,000.
Elsewhere in Texas, Amarillo homebuyers can expect to save for five years and two months and San Antonio would take eight years and one month.
Nationally, homebuyers in the Bloomington, Ill., metro area need just one year to save for a starter home. This can be attributed to the city being home to Illinois State University and having a high percentage of work-from-home jobs, above-average salaries, low housing costs, and starter homes for just more than $100,000.
The comprehensive study can take you down a rabbit hole and make you recall what it was like saving for that first starter home.
Methodology: RENTCafé used data from the U.S. Census Bureau, Economic Policy Institute, BLS, and Zillow to calculate the number of years it would take a two-person family to save for the down payment on a starter home.
