Downsize for a Down Fee in Much less Than 5 Years

Key Takeaways:

One in three renters surveyed could be prepared to sacrifice area for his or her homeownership dream.
Downsizing by one bed room would enable renters in 50 cities to avoid wasting up in lower than 5 years for a down fee on a starter house.
Dayton, OH, Philadelphia, PA and Jackson, MS are the highest locations the place renters may save up the quickest by downsizing their rental.
There’s one upside to residing in dear New York Metropolis: renters who surrender one bed room can put apart a formidable $20,000 per 12 months and would have the ability to put money into their first house in lower than three years.

In a white-hot housing market, renters who’re dreaming of their first house should adapt and compromise on one entrance or one other. And, when saving turns into difficult, one option to put apart cash for a primary house is to surrender just a little little bit of area. In truth, we discovered that renters who dream of transitioning to homeownership may save a mean of $3,735 per 12 months by merely downsizing by only one bed room — and plenty of renters are prepared to do exactly that. A current survey of three,659 rentcafe.com web site guests revealed that 36% of renters had been prepared to make use of this methodology with the intention to afford their first house.

With this in thoughts, we analyzed practically 200 cities throughout the nation to find out the locations the place renters may save up the quickest for a down fee on a starter house, by merely giving up one bed room of their present rental. Notably, it didn’t matter whether or not renters had been downsizing from a three-bedroom to a two-bedroom condominium, choosing a one-bedroom as an alternative of a two-bedroom condominium, or going for a studio somewhat than a one-bedroom rental. The yearly financial savings from all of those situations helped us calculate the period of time one would want to avoid wasting for a ten% down fee on a starter house in the identical metropolis.

In response to our evaluation of condominium rents by the variety of bedrooms and starter house costs, Dayton, OH; Philadelphia, PA; Jackson, MS; Chicago, IL; and Tuscaloosa, AL, are the highest 5 cities the place renters who downsize may save up the quickest for a down fee.

Sacrificing Area Whereas Chasing the Dream of Possession Pays Off in Much less Than 2 Years for Renters in Dayton, OH

Renters who’re prepared to compromise just a little bit on area may save a mean of $3,735 per 12 months, nationally — which is pretty vital, particularly in as we speak’s financial surroundings. Basically, that equates to a mean of six years and 7 months to avoid wasting sufficient for a down fee on a primary house.

Particularly, renters in Dayton, OH are the closest to possession. Right here, the median value of starter properties — mixed with the financial savings derived from downsizing their rental — would make it doable for them to afford a down fee in only one 12 months and 9 months.

And, whereas we’re on the subject of financial savings, you wouldn’t imagine simply how a lot New Yorkers may save per 12 months in the event that they compromised and gave up one bed room — a whopping $20,000, the largest yearly financial savings among the many cities analyzed. Whether or not that justifies downsizing in NYC is as much as renters to determine.

With out additional ado, listed here are the highest U.S cities the place renters may save the quickest for a down fee by merely downsizing their condominium. Amazingly, in some circumstances, this technique may assist flip renters into householders in lower than two years!

1. Dayton, OH

Time to avoid wasting for a down fee: 1 12 months, 9 months
Median starter house value: $57,652
Down fee worth: $5,765
Financial savings per 12 months after downsizing: $3,168

Renters in Dayton, OH have one of the best probabilities of turning into householders in lower than two years simply by downsizing. That’s proper: The sixth-largest metropolis in Ohio makes it simple for renters to satisfy their homeownership targets because of a low starter house value, which accounts for an inexpensive down fee worth of solely $5,765. Dayton can be one of many locations with essentially the most condominium area per individual, which makes downsizing much less difficult right here than it will be in different cities. Pair that with a dense suburban really feel and an inexpensive value of residing, and it’s protected to say that proudly owning a house in Dayton can actually be a dream come true for a lot of.

2. Philadelphia

Time to avoid wasting for a down fee: 1 12 months, 10 months
Median starter house value: $142,288
Down fee worth: $14,229
Financial savings per 12 months after downsizing: $7,416

Additionally coming in below the two-year mark, Philadelphia is the runner-up within the race towards achievable homeownership. Right here, renters may develop into house owners in a single 12 months and 10 months, with out compromising something aside from area. Though the median starter house value shouldn’t be essentially the most inexpensive on our record, the truth that downsizing in Philly provides as much as $7,416 in financial savings per 12 months makes the transition from renting to proudly owning an actual chance for a lot of.

3. Jackson, MS

Time to avoid wasting for a down fee: 2 years
Median starter house value: $36,413
Down fee worth: $3,641
Financial savings per 12 months after downsizing: $1,800

Nothing says Southern hospitality like inexpensive housing and homeownership that is a actuality as an alternative of a distant dream. And, for renters in Jackson, MS, saving up for a down fee on their first house might be achieved in precisely two years. With a low median starter house value of solely $36,413 and, in consequence, a more-than-decent down fee worth, Jackson residents can simply develop into householders within the state capital. The town can be identified for its robust service trade, which offers steady jobs for its residents.

4. Chicago

Time to avoid wasting for a down fee: 2 years, 3 months
Median starter house value: $201,848
Down fee worth: $20,185
Financial savings per 12 months after downsizing: $8,916

Chicago shouldn’t be solely the third-largest metropolis within the U.S., but additionally a extremely coveted place to be — and never simply due to its distinctive structure and deep-dish pizza. Renters right here may save $8,916 per 12 months in the event that they gave up one bed room, and that implies that they’d have the ability to afford a down fee for a starter house in two years and three months. Granted, the median value of such properties is way larger than the highest three places on our record, however the revenue that Chicago residents earn right here makes saving for a down fee nearly as achievable as it’s in Jackson, MS.

5. Tuscaloosa, AL

Time to avoid wasting for a down fee: 2 years, 3 months
Median starter house value: $122,221
Down fee worth: $12,222
Financial savings per 12 months after downsizing: $5,292

Whereas Tuscaloosa is generally identified for being house to the College of Alabama, it is also identified for its low value of residing and inexpensive housing. In truth, this Southern gem competes with Chicago with regards to how lengthy it will take for renters to avoid wasting for a down fee for a primary house in the event that they downsized by one bed room: By saving $5,292 per 12 months, renters in Tuscaloosa may afford the ten% down fee for a $122,221 median-priced starter house in two years and three months.

6. Detroit, MI

Time to avoid wasting for a down fee: 2 years, 3 months
Median starter house value: $45,478
Down fee worth: $4,548
Financial savings per 12 months after downsizing: $1,956

Detroit is one other one of many prime locations the place renters may transfer as much as homeownership by downsizing their condominium. Whereas it should solely save a yearly quantity of $1,956, the low median starter house value of $45,478 makes the transition comparatively quick. Similar to in Chicago and Tuscaloosa, renters in Detroit may save for a down fee in simply two years and three months.

7. Birmingham, AL

Time to avoid wasting for a down fee: 2 years, 6 months
Median starter house value: $55,125
Down fee worth: $5,513
Financial savings per 12 months after downsizing: $2,172

Within the largest metropolis in Alabama, it takes solely two and a half years to avoid wasting for a $5,513 down fee. Birmingham is one other Southern hotspot the place renters may simply transition to possession by giving up one bed room. This might generate yearly financial savings of $2,172 — which could not appear to be so much, however the metropolis’s inexpensive housing and the median starter house value of $55,525 makes these financial savings actually rely.

8. New York Metropolis, NY

Time to avoid wasting for a down fee: 2 years, 7 months
Median starter house value: $531,117
Down fee worth: $53,112
Financial savings per 12 months after downsizing: $20,148

It will take renters in New York Metropolis solely two years and 7 months to avoid wasting up for a down fee on a primary house. For individuals who are in a position to sacrifice a bed room, the town’s excessive rents can translate into excessive financial savings when downgrading. Particularly, giving up a single bed room in New York Metropolis may save renters a whopping $20,148 per 12 months! In concept, that makes it doable to personal a starter house right here in lower than three years — even contemplating the excessive value of starter properties ($531,117). In fact, starter properties in New York is likely to be more durable to search out than in different cities. And, compromising on area right here can be prone to be difficult as New York’s flats are among the smallest within the nation.

9. Greenville, NC

Time to avoid wasting for a down fee: 2 years, 8 months
Median starter house value: $125,894
Down fee worth: $12,589
Financial savings per 12 months after downsizing: $4,656

Greenville shouldn’t be solely North Carolina’s county seat, but additionally the house of East Carolina College and the scene of a booming job market. Plus, in 2021, Greenville was named one of the best metropolis within the nation for Gen Z renters. These are all good causes for folks to hire or personal in Greenville. Even higher: Climbing the property ladder is achievable in lower than three years — two years and eight months, to be precise. And, though the ten% down fee on a median starter house is across the $12,000 mark, the truth that downsizing by one bed room may assist renters save $4,656 per 12 months actually brings them nearer to fulfilling their homeowning desires.

10. Cellular, AL

Time to avoid wasting for a down fee: 2 years, 9 months
Median starter house value: $81,270
Down fee worth: $8,127
Financial savings per 12 months after downsizing: $2,916

In a current evaluation, we revealed that Cellular, AL was among the finest cities within the nation for renters and in addition one of many prime 10 cities that supply essentially the most condominium area. That implies that renters who wish to downsize in Cellular won’t sacrifice as a lot as renters from different cities. In the meantime, by doing so, they might save a yearly quantity of $2,916. The standard down fee worth for a starter house in Cellular is $8,127, making it doable to personal a primary house right here in two years and 9 months.

11. Columbus, GA

Time to avoid wasting for a down fee: 2 years, 9 months
Median starter house value: $79,124
Down fee worth: $7,912
Financial savings per 12 months after downsizing: $2,784

12. Lansing, MI

Time to avoid wasting for a down fee: 3 years
Median starter house value: $88,855
Down fee worth: $8,886
Financial savings per 12 months after downsizing: $2,904

13. Cleveland, OH

Time to avoid wasting for a down fee: 3 years, 4 months
Median starter house value: $60,700
Down fee worth: $6,070
Financial savings per 12 months after downsizing: $1,812

14. Pembroke Pines, FL

Time to avoid wasting for a down fee: 3 years, 4 months
Median starter house value: $235,633
Down fee worth: $23,563
Financial savings per 12 months after downsizing: $6,960

15. Statesboro, GA

Time to avoid wasting for a down fee: 3 years, 5 months
Median starter house value: $114,733
Down fee worth: $11,473
Financial savings per 12 months after downsizing: $3,336

16. Lubbock, TX

Time to avoid wasting for a down fee: 3 years, 5 months
Median starter house value: $127,513
Down fee worth: $12,751
Financial savings per 12 months after downsizing: $3,696

17. Auburn, AL

Time to avoid wasting for a down fee: 3 years, 5 months
Median starter house value: $210,230
Down fee worth: $21,023
Financial savings per 12 months after downsizing: $6,072

18. Boca Raton, FL

Time to avoid wasting for a down fee: 3 years, 6 months
Median starter house value: $294,132
Down fee worth: $29,413
Financial savings per 12 months after downsizing: $8,400

19. Columbia, MO

Time to avoid wasting for a down fee: 3 years, 6 months
Median starter house value: $180,461
Down fee worth: $18,046
Financial savings per 12 months after downsizing: $5,040

20. Tulsa, OK

Time to avoid wasting for a down fee: 3 years, 7 months
Median starter house value: $96,092
Down fee worth: $9,609
Financial savings per 12 months after downsizing: $2,676

Prime Cities by State: Here is The place You Can Save the Quickest in Your State

Methodology

RentCafe.com is a nationwide condominium search web site that permits renters to simply discover flats and homes for hire all through the US.
For this report, we ranked cities based mostly on the shortest period of time wanted to avoid wasting for a ten% down fee on a starter house, utilizing financial savings in hire from downsizing an condominium.
The financial savings are strictly because of downsizing a rental condominium by one bed room and had been calculated from Yardi Matrix knowledge as a weighted common based mostly on rents by bed room varieties: Financial savings in hire by downsizing from one-bedroom to studio flats, from two-bedroom to one-bedroom flats, and from three-bedroom to two-bedroom flats. The quantities offered are for informational functions solely. Precise financial savings from downsizing rely on the precise location, constructing high quality, and condominium measurement.
We initially analyzed a complete of 728 U.S. cities. Of these, the ultimate report included 198 cities the place the ten% down fee quantity might be saved in lower than 10 years.
Starter House Costs had been in accordance with ZHVI Zillow House Worth Index.

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