How Long Did Mom and Dad Save for Their Down Payment?

With each new generation of home buyers, housing prices rise — and so does the time it takes to save enough money.

Between 1970 and 1985, a typical American family could save 10 percent of their income for about five years and accumulate a 20 percent down payment on a median-priced existing single-family home, according to a New York Times analysis of income and housing-price data from the U.S. Census Bureau and the National Association of Realtors. The analysis used the census definition of family income, which includes income of family members 15 or older living in the household, but not other members of the household, such as roommates. As of 2023, the year representing the most recent census data for income, it would take nearly eight years, the data shows.

A major reason for the discrepancy is that home prices have increased at a faster rate than family income. And in recent years, a shortage of homes has led to greater price increases. In 2023, the median sale price of an existing single-family home ($394,100) was about four times more than the median family income ($100,800). That gap is nearly twice as wide as it was in 1970, the data shows, meaning that many American families — even those with above median earnings — will struggle to keep up with prices.

It’s important to remember that the gap may be a lot wider depending on where you live. In New York City, for example, the median home price according to Zillow is $872,667. According to the census, the median family income is $90,619. At those levels, it would take a family 19 years to save up a 20 percent down payment.

Loans that allow lower down payments exist for some, including first-time buyers and veterans, but qualified borrowers still need to manage the resulting higher monthly payments. Reaching 20 percent of the purchase price can be helped by salary increases or depositing money into high-interest savings accounts. Earning 5 percent interest can cut the time it takes to save for a down payment by a year. But it would still take two to three years longer than it did 40 or 50 years ago.