The down payment is the single biggest barrier to homeownership for most Americans. We calculated how much a 10% down payment costs in every major metro, and how long it would take the typical household to save it—assuming they can put aside 10% of their gross income each year.
Methodology
For each metro, we calculate:
- Down payment amount: 10% of median home price (Zillow Home Value Index, Dec 2025)
- Closing costs: Estimated at 3% of purchase price
- Total upfront cost: Down payment + closing costs
- Annual savings capacity: 10% of metro median household income
- Years to save: Total upfront cost Ă· annual savings capacity
How Long It Takes: Selected Metros
| Metro | Median Price | 10% Down | + Closing | Total | Years to Save |
|---|---|---|---|---|---|
| San Jose | $1,480,000 | $148,000 | $44,400 | $192,400 | 12.4 yrs |
| San Francisco | $1,150,000 | $115,000 | $34,500 | $149,500 | 10.8 yrs |
| Los Angeles | $865,000 | $86,500 | $25,950 | $112,450 | 13.7 yrs |
| San Diego | $825,000 | $82,500 | $24,750 | $107,250 | 11.2 yrs |
| Honolulu | $895,000 | $89,500 | $26,850 | $116,350 | 12.2 yrs |
| Boston | $725,000 | $72,500 | $21,750 | $94,250 | 8.7 yrs |
| Seattle | $690,000 | $69,000 | $20,700 | $89,700 | 8.2 yrs |
| New York | $620,000 | $62,000 | $18,600 | $80,600 | 9.2 yrs |
| Denver | $575,000 | $57,500 | $17,250 | $74,750 | 7.9 yrs |
| Miami | $520,000 | $52,000 | $15,600 | $67,600 | 9.9 yrs |
| Austin | $445,000 | $44,500 | $13,350 | $57,850 | 6.3 yrs |
| Nashville | $435,000 | $43,500 | $13,050 | $56,550 | 7.2 yrs |
| Phoenix | $415,000 | $41,500 | $12,450 | $53,950 | 6.9 yrs |
| Dallas | $365,000 | $36,500 | $10,950 | $47,450 | 5.8 yrs |
| Atlanta | $370,000 | $37,000 | $11,100 | $48,100 | 5.9 yrs |
| Houston | $310,000 | $31,000 | $9,300 | $40,300 | 5.2 yrs |
| Chicago | $345,000 | $34,500 | $10,350 | $44,850 | 5.5 yrs |
| Pittsburgh | $205,000 | $20,500 | $6,150 | $26,650 | 3.9 yrs |
| Cleveland | $195,000 | $19,500 | $5,850 | $25,350 | 4.4 yrs |
| Oklahoma City | $210,000 | $21,000 | $6,300 | $27,300 | 4.4 yrs |
The Los Angeles Problem
Los Angeles stands out as the most extreme case. Despite relatively high metro incomes ($82,000 median), the $865,000 median home price means 13.7 years of dedicated saving for a 10% down payment. For a first-time buyer earning the median, this means starting to save at age 22 and not reaching the goal until age 36—assuming no interruptions, no student debt diverting savings, and no rent increases that erode savings capacity.
The Generational Shift
In 1990, the median home cost 3.1x the median household income. Today, it costs 5.3x. This means:
- In 1990: A 10% down payment required 3.7 months of median gross income
- Today: A 10% down payment requires 6.3 months of median gross income
- Years to save (at 10% savings rate): 1990 = 3.1 years, today = 5.3 years
What About 3.5% Down (FHA)?
FHA loans allow down payments as low as 3.5%, dramatically reducing the upfront barrier. However:
- FHA requires mortgage insurance premiums (1.75% upfront + 0.55% annually) for the life of the loan
- Many sellers in competitive markets reject FHA offers due to stricter appraisal requirements
- FHA loan limits are $498,257 in most counties ($1,149,825 in high-cost areas), insufficient for median homes in many coastal metros
- The lower down payment results in higher monthly payments, requiring more income to qualify
Down Payment Assistance Programs
Over 2,000 down payment assistance (DPA) programs exist nationally, yet awareness and usage remain low:
- Only 13% of first-time buyers used a DPA program in 2024
- Average DPA grant/forgivable loan: $8,000-$15,000
- Most common barrier: buyers don't know programs exist (68% of non-users were unaware)
- Income limits typically: 80-120% of AMI, which excludes moderate-income households in high-cost areas
The Wealth Transfer Reality
In practice, the "Bank of Mom and Dad" is the most common source of down payment assistance for first-time buyers. An estimated 38% of first-time buyers under 30 receive family financial help, averaging $58,000. This creates a self-reinforcing cycle: families with homeownership wealth help the next generation buy; families without it cannot.
For the 55% of Black households and 47% of Hispanic households that rent, there is little family homeownership wealth to pass down. The down payment barrier is thus both a consequence and a perpetuator of the racial wealth gap.
Data Sources
Zillow Home Value Index (Dec 2025), Census ACS 2023 Median Household Income, National Association of Realtors Profile of Home Buyers and Sellers, Down Payment Resource, Federal Housing Administration Annual Report