What would take a renter to save up for a down payment in today’s market?: Massachusetts Homebuyers Homwownership

 It could take Boston-Ma area renters more than a decade to save for a down payment in today’s market, and that’s no surprise, as starter-home prices are growing almost seven times faster than renter incomes, according to a new report from Zillow. According to the report, it would take an average rental household about six years and five months to save enough for a 20 percent down payment on a typical starter home worth $148,500 a full year longer than it would have taken to save for a starter home down payment five years ago. That’s if they save 10 percent of their income.

  In the Boston metro area, an average renter saving 10 percent of their income would take 13 years to save for a 20 percent down payment on a typical starter home worth $399,275. Zillow economic data analyst Nicole Bachaud says first time homebuyers face more challenges in coming up with a down payment without having equity from a previous home sale. “In a housing market where prices are rising at record rates, especially when compared to renter incomes, the ever increasing sum of a 20 percent down payment can feel out of reach,” she said in a press release.

 “The good news is that buyers who want to take advantage of today’s low mortgage rates can do so without putting a full 20 percent down most conventional mortgages allow as little as 3 percent to 5 percent. That lower upfront payment comes with higher monthly payments, but the opportunity to build equity can outweigh those extra costs for many.” First time homebuyers could secure a mortgage with less than 20 percent down, according to the analysis, which found 64 percent of first time homebuyers do just that, and 25 percent put down 5 percent or less, allowing them to save what they need in less time an average of three years and three months to save up a 10 percent down payment and a year and seven months to save 5 percent.

The post How long would it take a renter to save up for a down payment in today’s market? appeared first on Boston Agent Magazine.

FIRST TIME HOMEBUYERS