A typical renter household in Dallas now needs 12 years to save enough for a starter-home down payment and closing costs, nearly double the seven years it took back in 2019. The finding comes from a new national report examining how the math of homeownership has shifted for families across the country, and it lands at a moment when monthly home payments have become out of reach for many due to a mix of down payments, closing costs, high mortgage rates and elevated home prices.
The analysis comes from the Julian Bond Institute for Financial Equity Research, a nonprofit research arm of the Center for Responsible Lending, which released the report on Thursday examining how long a typical renter family needs to save for a starter home’s upfront costs, according to a release distributed via PR Newswire. The institute compared 2019 figures against the most recent survey results to track how the savings timeline has changed, drawing on its broader Project 2050 survey, which looked at Americans’ financial aspirations across generations and racial groups along with the obstacles standing in their way. Despite the lengthening timeline, the institute reported that Americans across generations and racial and ethnic backgrounds have not given up on homeownership.
Nationally, the typical American household now needs 16 years to save enough to buy a starter home at the median price of $335,574, up from eight years when the median starter home cost $217,520 in 2019, the PR Newswire release states. A middle-income family now needs 12 years to save, twice as long as in 2019, while the typical Black family seeking homeownership now needs 21 years, an increase of 10 years since 2019.
Why the Math Got So Much Harder
The report’s calculations assume a 3.5 percent down payment, matching the Federal Housing Administration’s requirement for first-time buyers, and define a starter home as costing $335,574, or 80 percent of the median sales price of existing homes, according to NPR. The institute’s saving-rate definition measures the share of family income left over for a home purchase after other expenditures, assuming 75 percent of that leftover savings can be devoted to the purchase. By that measure, the estimated national saving rate sits at just 2.63 percent…