15. Arlington, Virginia

Average household income: $121,933

Median home price: $723,539

20% down payment: $144,708

Years needed (20% savings rate): 5.9

Years needed (8% savings rate): 14.8

(Photo: Shutterstock)

14. Boston

Average household income: $88,577

Median home price: $526,712

20% down payment: $105,342

Years needed (20% savings rate): 5.9

Years needed (8% savings rate): 14.9

(Photo: Shutterstock)

13. Washington, D.C.

Average household income: $100,930

Median home price: $614,371

20% down payment: $122,874

Years needed (20% savings rate): 6.1

Years needed (8% savings rate): 15.2

(Photo: Shutterstock)

12. Fremont, California

Average household income: $148,804

Median home price: $933,662

20% down payment: $186,732

Years needed (20% savings rate): 6.3

Years needed (8% savings rate): 15.7

(Photo: Shutterstock)

11. Seattle

Average household income: $102,535

Median home price: $654,147

20% down payment: $130,829

Years needed (20% savings rate): 6.4

Years needed (8% savings rate): 15.9

(Photo: Shutterstock)

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10. Chula Vista, California

Average household income: $77,096

Median home price: $502,608

20% down payment: $100,522

Years needed (20% savings rate): 6.5

Years needed (8% savings rate): 16.3

(Photo: Shutterstock)

9. San Jose, California

Average household income: $125,382

Median home price: $857,244

20% down payment: $171,449

Years needed (20% savings rate): 6.8

Years needed (8% savings rate): 17.1

(Photo: Shutterstock)

8. San Francisco

Average household income: $148,699

Median home price: $1,091,146

20% down payment: $218,229

Years needed (20% savings rate): 7.3

Years needed (8% savings rate): 18.3

(Photo: Shutterstock)

7. San Diego

Average household income: $83,174

Median home price: $615,127

20% down payment: $123,025

Years needed (20% savings rate): 7.4

Years needed (8% savings rate): 18.5

(Photo: Shutterstock)

6. Anaheim, California

Average household income: $74,937

Median home price: $582,269

20% down payment: $116,454

Years needed (20% savings rate): 7.8

Years needed (8% savings rate): 19.4

(Photo: Shutterstock)

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5. Irvine, California

Average household income: $109,305

Median home price: $861,567

20% down payment: $172,313

Years needed (20% savings rate): 7.9

Years needed (8% savings rate): 19.7

(Photo: Shutterstock)

4. New York

Average household income: $76,877

Median home price: $616,641

20% down payment: $123,328

Years needed (20% savings rate): 8

Years needed (8% savings rate): 20.1

(Photo: Shutterstock)

3. Oakland, California

Average household income: $80,130

Median home price: $678,575

20% down payment: $135,715

Years needed (20% savings rate): 8.5

Years needed (8% savings rate): 21.2

(Photo: Shutterstock)

2. Long Beach, California

Average household income: $64,009

Median home price: $561,300

20% down payment: $112,260

Years needed (20% savings rate): 8.8

Years needed (8% savings rate): 21.9

(Photo: Shutterstock)

1. Los Angeles

Average household income: $64,724

Median home price: $648,202

20% down payment: $129,640

Years needed (20% savings rate): 10

Years needed (8% savings rate): 25

(Photo: Shutterstock)

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(Related: 12 Best Cities for Financial Advisors to Start a Career)

Expectations soar, then reality deflates them. Most people have had this experience, not least millennials entering the housing market for the first time.

Most millennials tend to greatly underestimate the amount of money they will need for a down payment, according to a study of young buyers’ housing needs and expectations released Monday by Point2, an international real estate search portal.

The study determined how much a down payment would cost in the 100 biggest U.S. cities and how long it would take them to save that much.

Seventy-four percent of millennials in the study who said they were interested in buying a home wanted to do so in the next 12 months.

However, 88% of respondents between 25 and 40 years old reported significantly less in savings than the average national down payment amount, which is $62,600 — 40% expected the amount to be less than $10,000.

Moreover, 61% of participants reported savings of less than $10,000, and 14% of these had no savings at all.

The coronavirus pandemic has only increased millennials’ existing challenges. As a result, unemployment and financial insecurity might widen the gap between their money-saving capabilities and their homebuying goals, Point2 said.

It noted that the average savings rate in the last decade was 8%. And although personal savings shot up in April, reaching 33.7%, one month of extraordinary budgeting may not move the needle for prospective homebuyers.

The survey, which was posted on Point2Homes.com between Aug. 21 and Sept. 7, had 6,780 respondents.

Point2 explored how many years millennials would need to save for a down payment based on current adjusted median household income for that age group, adjusted median home prices and monthly savings rates.

Researchers considered two different percentages: 20% of income, which is the recommended saving rate, and 8%, which they said was the average household saving rate in the U.S., citing Trading Economics.

They determined that by considering savings rates, median incomes and median home prices, the time needed to save for a 20% down payment in the 100 largest U.S. cities varies significantly, from as long as 10 years in the cities requiring the largest down payments to little more than two years in those at the other end of the spectrum.

See the gallery for the 15 cities with the largest median down payments, ranked by the length of time it would take a millennial household to afford them.

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