Saving for a starter home now takes renters 16 years, report finds
A median-income renter household now needs 16 years to save for a down payment and closing costs on a starter home, according to NPR. That is twice as long as in 2019, the Center for Responsible Lending found. Rising rents and costs have eaten into savings.
A median-income renter household now needs 16 years to save up to buy a starter home, according to NPR. The figure comes from a new report by the Center for Responsible Lending, a research nonprofit.
The 16 years covers a down payment and closing costs for a renter household with a median income, NPR reported. That is twice as long as in 2019, the last time the center ran the same numbers.
"Over the last seven years, the time to save up that down payment and closing costs has doubled," said Mike Calhoun, the center's president, according to NPR. The report came from the center's Julian Bond Institute.
For a median-income Black renter household, it would take 21 years, NPR reported. For middle-income households, making about $50,000 to $120,000, the time has also doubled, to 12 years. For police officers, firefighters, nurses and teachers, it now runs from 10 to 13 years, the report found.
Home prices have shot up since 2019, NPR reported. Inflation spiked and has stayed high. Food, gas and health care cost more. Closing costs have risen too, partly because of homeowners insurance. Renters' incomes have not kept pace, and savings rates have dropped.
The center puts the cost of a starter home at $335,574, NPR reported. That is 80% of the median price of existing homes sold. The time to save ranges from 11 years in Houston to 24 years in Los Angeles.
Calhoun said the numbers are likely an undercount, NPR reported. The center used a 3.5% down payment, the minimum the Federal Housing Administration requires. But the median first-time buyer puts down about 10%, NPR said.
The report calls for zoning changes to allow more small, cheaper homes, NPR reported. That includes duplexes, townhomes and factory-built homes. A survey by the center found that young adults still want to own homes at the same rate as earlier generations.
What we know: The center found the time to save for a starter home has doubled since 2019, to 16 years for a typical renter.
What we don't: How other groups' estimates compare. Only NPR has reported this so far; NewsHabit hasn't seen independent confirmation.
Where outlets agree The figures come from NPR's report on the Center for Responsible Lending's analysis.
Where they differ NPR reports the findings as the center describes them, and no housing group has responded to dispute them in the reports NewsHabit reviewed.