HOW LONG DOES EACH GENERATION HAVE TO SAVE FOR A DOWN PAYMENT?
2015-12-17To find out which age groups can buy homes the fastest, we've mashed up Metrostudy data with Census results on householders' median income, median home price, and median mortgage rate. As a widely-applied rule suggests, homebuyers or households should spend no more than 28% of income on total housing costs. So, we've calculated the amount of money each householder has left, after he or she pays off other mortgage payments, within that 28% of income. Then, we compared the time that householders in a certain age range need to save up the down payment. (We went with the 10% down payment rate in our analysis.)
Retirees aged 65 and over need about 7.37 years to save up the down payment for a $291,000 home, due to the loss of income that comes with retirement.
It takes the least amount of time for householders aged 45-to-54-year-old to save up the money for a down payment (possibly due to the fact they have the most earning power at that age), but it still takes more than three years and a half to take out a loan for home buying.
Keep in mind that our chart and analysis above are based on median household income and median home price for each age group. Chances are that some folks will need longer saving time if they decide to retire early, choose to buy a larger and more expensive home to house multiple generations, or have outstanding debts preventing them from saving as much as they'd like, like student loans.
source: http://www.builderonline.com/money/affordability/how-long-does-each-generation-have-to-save-to-put-10-down-on-a-median-price-new-home_o
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