Renters, this is how many years it takes to save up for a down payment on a home

For renters who want to own their homes one day, the journey to build up enough savings for a down payment will be a long one.

A new report from Zillow Z, -1.44%  subsidiary HotPads, a rental search website, looked at the average renter nationwide to see how long it would take them to build a down payment. If they earned the national median income ($56,784 per year) and saved 20% of their income each month to put toward a down payment, it would take 77 months (or nearly 6.5 years) to build a 20% down payment for a median-value home ($216,000).

And if that renter were to decide to aim for a smaller down-payment, they wouldn’t be a whole lot better off. It would take over a year to save for a 3.5% down payment on the median-value home nationwide. Putting less than 20% down isn’t a foolproof alternative though — it can increase a borrower’s costs through added private mortgage insurance fees, plus it will equate to larger monthly loan payments.

Of course, that doesn’t entirely take into account the difference rising rental costs will make for most renters. The median monthly cost of rent is currently $1,480 nationwide, up 2.5% from a year ago, according to HotPads. Nor does that timeline consider the extra strain of student loan debt, which can also prolong the amount of time it takes to save up for a down payment.

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And in some of the country’s most expensive housing markets, it takes even longer to save for a down payment. It would take nearly 36 years before renters earning the median salary in San Jose, Calif., could amass enough to put down 20% on a home, if they squirrelled away one-fifth of their income each month. Even if the down payment were reduced to 3.5%, it would still take the median renter more than six years to save up enough money.

Other cities where saving for a down payment could take renters more than two decades include San Francisco (31 years, 6 months), Los Angeles (28 years, 1 month) and San Diego (22 years, 7 months). Outside of California, it could take the median renter more than a decade to grow their down-payment savings to reach that 20% threshold on a median-value home in New York, Boston, Denver and Portland, Ore.

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