Moving Back Home With Parents Could Help Young Adults Save For Down Payment On A House

Saving for a down payment is one of the biggest barriers to homeownership. But for the record number of young adults who moved back home during the pandemic and are fortunate to still have a job, homeownership may be more attainable than they think, according to a new report released today by realtor.com.

By channeling their would-be rent into savings, homeownership could be within reach. For someone paying the median one-bedroom rent of $1,533, it would take 11 months to save $17,000, a 5% down payment for a $340,000 home, the median-priced home in the nation, according to realtor.com’s analysis of listing and rental data for the U.S. and the nation’s 20 largest metros in December 2020.

Across the 20 largest metros, it would take longer, an average of 15 months to save up for a 5% down payment based on home prices and rent savings in each market. It’s fastest to save for a 5% down payment in Chicago followed by Philadelphia and St. Louis, while it takes the longest amount of time in Los Angeles, San Francisco and San Diego.

“Although many members of the Millennial and Gen Z generations were forced to move home because they lost their jobs in 2020, others chose to forgo their rentals because they had the opportunity to work remotely and preferred to wait out the pandemic with family,” said realtor.com chief economist Danielle Hale. “For those who have been able to channel their would-be rent into savings, the pandemic’s silver lining could be becoming a homeowner sooner than they otherwise would have.”

In Chicago, for example, based on the median rent for a one-bedroom apartment of $1,521, it would take 11 months to save $16,350, a 5% down payment on the median list price home of $327,000.

At the opposite end of the spectrum, in Los Angeles, where the median list price for a home is just under $1 million and the median one-bedroom rent is $2,250, it would take 22 months to save for a 5% down payment of $50,000.

Atlanta-Sandy Springs-Roswell, Georgia

One-bedroom median rent: $1,310

Median listing price: $350,000

5% down payment: $17,500

Months of saving for down payment: 13

Boston-Cambridge-Newton, Massachusetts-New Hampshire

One-bedroom rent: $2,109

Median listing price: $649,000

5% down payment: $32,450

Months of saving for down payment: 15

Chicago-Naperville-Elgin, Illinois-Indiana-Wisconsin

One-bedroom rent: $1,521

Median listing price: $327,000

5% down payment: $16,350

Months of saving for down payment: 11

Dallas-Fort Worth-Arlington, Texas

One-bedroom rent: $1,125

Median listing price: $354,000

5% down payment: $17,700

Months of saving for down payment: 16

Denver-Aurora-Lakewood, Colorado

One-bedroom rent: $1,495

Median listing price: $533,000

5% down payment: $26,650

Months of saving for down payment: 18

Detroit-Warren-Dearborn, Michigan

One-bedroom rent: $970

Median listing price: $252,000

5% down payment: $12,600

Months of saving for down payment: 13

Houston-The Woodlands-Sugar Land, Texas

One-bedroom rent: $1,060

Median listing price: $330,000

5% down payment: $16,500

Months of saving for down payment: 16

Los Angeles-Long Beach-Anaheim, California

One-bedroom rent: $2,250

Median listing price: $999,000

5% down payment: $49,950

Months of saving for down payment: 22

Miami-Fort Lauderdale-West Palm Beach, Florida

One-bedroom rent: $1,691

Median listing price: $409,000

5% down payment: $20,450

Months of saving for down payment: 12

Minneapolis-St. Paul-Bloomington, Minneapolis-Wisconsin

One-bedroom rent: $1,358

Median listing price: $344,000

5% down payment: $17,200

Months of saving for down payment: 13

New York-Newark-Jersey City, New Jersey-Pennsylvania

One-bedroom rent: $2,345

Median listing price: $627,000

5% down payment: $31,350

Months of saving for down payment: 13

Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware, Maryland

One-bedroom rent: $1,495

Median listing price: $327,000

5% down payment: $16,350

Months of saving for down payment: 11

Phoenix-Mesa-Scottsdale, Arizona

One-bedroom rent: $1,195

Median listing price: $413,000

5% down payment: $20,650

Months of saving for down payment: 17

Riverside-San Bernardino-Ontario, California

One-bedroom rent: $1,610

Median listing price: $475,000

5% down payment: $23,750

Months of saving for down payment: 15

San Francisco-Oakland-Hayward, California

One-bedroom rent: $2,414

Median listing price: $995,000

5% down payment: $49,750

Months of saving for down payment: 21

Seattle-Tacoma-Bellevue, Washington

One-bedroom rent: $1,657

Median listing price: $628,000

5% down payment: $31,400

Months of saving for down payment: 19

St. Louis, Missouri-Illinois

One-bedroom rent: $1,035

Median listing price: $232,000

5% down payment: $11,600

Months of saving for down payment: 11

Tampa-St. Petersburg-Clearwater, Florida

One-bedroom rent: $1,225

Median listing price: $300,000

5% down payment: $15,000

Months of saving for down payment: 12

Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia

One-bedroom rent: $1,767

Median listing price: $497,000

5% down payment: $24,850

Months of saving for down payment: 14