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The Journey to Homeownership in 2025

Saving for a down payment continues to be a significant hurdle for many aspiring homeowners in the U.S. Although housing market conditions have shown signs of recovery, recent analyses indicate that, as of 2025, it takes the average household about seven years to save for a typical down payment—a notable decrease from the alarming 12 years recorded at the peak in 2022. This insight comes from a new report by Realtor.com, shedding light on the ongoing challenges faced by potential homebuyers.

Changes in Market Conditions

The time required to save for a down payment has decreased as home price growth has stabilized, and affordability has seen slight enhancements. However, this duration is still nearly twice the pre-pandemic average, illustrating that challenges remain. According to Danielle Hale, the chief economist at Realtor.com, the rising home prices combined with mounting competition have elevated what constitutes a typical down payment at the same time personal savings rates have dipped significantly.

Financial Struggles of Households

In 2025, the average personal savings rate in the U.S. has fallen to 5.1%, down from 6.5% prior to the pandemic. This drop severely restricts how quickly households can build the necessary funds for their upfront housing costs. Furthermore, the traditional down payment amount has risen dramatically. For example, in the third quarter of 2019, buyers needed around $13,900. This figure has more than doubled to about $30,400 by 2025, extending the timeline for saving. The peak savings period was recorded in April 2022, at roughly 16 years, which was an unprecedented high.

A Closer Look at Metropolitan Areas

Across the nation, the disparity in the time required to save for a down payment varies significantly, particularly stark in high-cost coastal cities. In areas such as San Francisco, San Jose, and Los Angeles, individuals may find themselves needing to save for 20 to over 35 years for a typical down payment, effectively excluding many first-time buyers and those with moderate incomes from entering the housing market.

Examples from High-Cost Metros:

• - San Francisco-Oakland-Fremont, CA: Needs 36.5 years, with a median down payment of $245,466.
• - San Jose-Sunnyvale-Santa Clara, CA: 36.2 years, with a median down payment of $304,623.
• - Los Angeles-Long Beach-Anaheim, CA: 34.1 years, median down payment of $170,035.

These figures starkly emphasize the struggles many face, with Hannah Jones, a senior economic research analyst at Realtor.com, noting how typical down payments can sometimes surpass a full year’s income for many households, making homeownership appear out of reach for younger buyers.

Affordable Regions Are More Attainable

Conversely, several Southern metropolitan areas present a brighter outlook. In cities with a significant military presence, where VA loans are commonly available, potential homeowners can save for a down payment in less than five years. Here’s a glance at some of these more affordable regions:

• - Atlanta-Sandy Springs-Roswell, GA: Just 4.8 years needed, with a median down payment at $22,479.
• - Tucson, AZ: 4.7 years, median down payment of $17,773.
• - Houston-Pasadena-The Woodlands, TX: Only 3.5 years for a median down payment of $14,927.

Military hubs benefit from the availability of VA loans, allowing many buyers to put down little to no money upfront, thus directing savings toward other closing costs.

A Path Forward: Embrace Saving

Despite the daunting landscape, an encouraging three-quarters of Americans still view homeownership as a crucial aspect of the American dream. For first-time buyers, easing rentals can create opportunities to accumulate savings, while those owning homes can use their savings to lessen their loan balances or handle higher payments in the future.

In the words of Jones, “Saving consistently, even in modest amounts, is a pivotal first step toward homeownership.” In today’s market, building a financial cushion can be instrumental when buyers are finally ready to make a move.

Conclusion

The journey to homeownership may be longer for many than it was pre-pandemic, yet the continued effort to save is a critical component of achieving the dream of owning a home. With financial awareness and strategic planning, prospective buyers can navigate the complexities of today's real estate market successfully.