Here’s How Long It’d Take to Save Up in the 50 Biggest US Cities
The cost of housing in the biggest cities in the U.S. has
reached sky-high levels in recent years, and owning
your own home has become an unattainable dream for most people. Home prices in
cities like New York City and San Francisco are so high that most of us can’t
even afford monthly mortgage payments, let alone purchasing a home with all
If you’re thinking, well, I’m
not ready to tie myself down to a bank and spend all my hard-earned money on
monthly mortgage payments, then you’re probably in for a big disappointment.
You might think it’s a smart move to save up money each month for a few years
to pay for a home in full and not worry about banks and loans and defaults. But
in many U.S. cities, that won’t be a viable option, as it would take decades to
save up the necessary amount.
Let’s look at the numbers. The
average price of a single-family home in San Francisco costs $1,440,900 in
2019, according to Zillow data, while one-bedroom apartments sell for $883,700.
This means that to buy a single-family home in the Golden City, you need to
earn $308,763 per year to keep your mortgage from taking more than 30% of your
income. Not a lot of people make that kind of money, so you might be wondering,
how long would it take to save up for an all-cash payment? We must warn you;
the numbers paint a grim picture.
We looked at average home
prices in the 50 most populous cities in the U.S. and calculated how long it
would take to save up for a single-family home or a one-bedroom apartment. Our
formula assumed homebuyers would be putting aside no more than 30% of the
national median income each month. The differences are pretty striking; in some
cities, it would take decades to be able to pay for a home in full, while in
smaller cities, you could become a homeowner unburdened by mortgage payments in
just a few years. Check out the list of cities and data in the interactive
If you were to save up 30% of
the national median income each month to buy a single-family home in San
Francisco in full, it would take you 81 years to come up with that amount,
based on the most recent national wage data from 2017.
Other California cities are
catching up fast to San Francisco in terms of housing costs. You’d need to save
up for 62 years to be able to buy a single-family home in San Jose, and 43
years in Los Angeles. Talk about delayed gratification.
One-bedroom apartments aren’t
exactly cheap either; it takes 56 years to buy one in full in San Francisco, 30
years in Los Angeles, and 24 years in Seattle. By comparison, being able to
make an all-cash payment on a one-bedroom in NYC would take 14 years, which is not exactly a short time, but
it’s slightly more attainable if you start saving up early.
For many people, however,
saving up 30% of their monthly income for decades is simply not worth it, and
they choose to rent or opt for coliving and spend that money on
traveling or other hobbies. But if you really want to own your
own home, without cutting out all other expenses from your life, you might want
to look elsewhere. If you’re not tied down to a specific location or set on
living in a popular and expensive place like New York City, where luxury
living is the norm, then you might want to consider
The American dream of owning a
home is still within reach in a few major U.S. cities, including Cleveland,
Oklahoma City, and Wichita, Kan., whereby saving up 30% of your income, you’d
be able to afford to buy a single-family home in just three years.
You might also consider moving
to satellite cities, or smaller cities neighboring big urban centers, like
Aurora, Colorado, where you can save up and buy a one-bedroom apartment in full
in just eight years. It might be worth commuting to Denver every day to be able
to own your own place and never have to worry about mortgage payments or rent.
In the end, it all boils down
to preferences; if you’re not keen on living in a super-crowded,
super-expensive, super-popular city like San Francisco, L.A., or New York City,
then your chances of becoming a homeowner are much higher. If, however, your
job requires you to live in a particular area or you’re simply attached to
where you live, then you might want to rethink that homeownership dream and
organize your budget a little bit differently.
We used Zillow housing data as
a source to see the amount you need to earn to be able to afford to buy a
single-family home or a one-bedroom apartment in the 50 most populous cities in
the U.S. We added a 5% annual interest to a 30-year mortgage with no down
payment and calculated the monthly rent for the price of the house at the end
of the mortgage. We calculated how much you’d need to earn each year by not
spending more than 30% on house costs, based on Census findings. The formula we
used includes PITI (principal, interest, property tax, and homeowner’s
insurance) based on a recent HSH study.
We calculated how long it would
take to save for a full house payment based on initial home price data from
Zillow. The formula is based on national average wage data from the Social
Security Administration, and it presents the number of years it would take to
save for a full payoff by saving 30% of your annual income. The latest national
average wage index available is for 2017.
The 50 cities are sorted in
descending order according to population numbers.