Saving for a down payment can be one of the biggest barriers to homeownership, even as the housing market appears to be improving.
In 2025, the typical U.S. household needed seven years to save for a typical down payment, according to a December study by Realtor.com. In some high-cost coastal metropolitan areas, it can take the median household decades to save enough.
These findings present advisors with another opportunity to bolster their financial planning services by helping affluent clients invest and save for this significant life event.
“Higher home prices and intensified competition have pushed typical down payments higher, at the same time that inflation and rising household expenses have reduced savings rates,” Realtor.com’s chief economist, Danielle Hale, said in a statement.
“Although conditions have improved since 2022, today’s timeline shows that saving for a home takes meaningfully longer than it did before the pandemic, especially in high-cost markets.”
To estimate how many years it would take to save for a down payment in the 50 largest U.S. metropolitan areas, researchers used the monthly personal savings rate through September, annual estimated median household income and monthly median down payment dollar amount data.
According to the study, the U.S. personal savings rate averaged 5.1% of income through November, below the pre-pandemic norm of 6.5% and far below pandemic-era highs. This rate, in turn, limits how quickly households can accumulate funds for upfront housing costs.
At the same time, high home prices and increased competition have pushed down payments higher. In the third quarter of 2019, the typical buyer put about $13,900 down. By last year’s third quarter, that figure had more than doubled to $30,400, significantly extending the time required to save.
The time needed to save for a typical down payment briefly peaked at about 16 years in April 2022, more than triple pre-pandemic norms, before falling to about seven years in recent data as competition cooled and affordability gradually improved.
For clients with their hearts set on buying a home in the near future, it might be worth tapping retirement accounts for some extra cash. One option is to take a 401(k) loan, as certified financial planner David Demming of Demming Financial Services Corp. in Aurora, Ohio, points out.
Traditional IRA holders can withdraw up to $10,000 toward the purchase of a first home without penalty, but the withdrawal is subject to income tax. Roth IRA contributions can be withdrawn without taxes or penalties at any time, and up to $10,000 in earnings can be withdrawn without taxes or penalties for a first home purchase.
But as planning pros Ed Slott and Jeff Levine warned in a recent episode of their podcast, tapping retirement assets early can have long-term consequences for a client's standard of living in retirement.
See the accompanying gallery for the 12 U.S. metro areas where it takes the longest time to save for a down payment on a home, according to Realtor.com.
— Katie Rass contributed to this report.
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