How Long it Takes to Save for a Down Payment
Which age groups are financially fit to buy homes the fastest? Hanley Wood’s Data Studio recently used Metrostudy and Census data to find out how long it would take each generation to save up a 10 percent down payment on a home based on the median household income and median home price for each age group.
Millennials and retirees tend to save for the longest amount of time in order to put a 10 percent down on a home, according to the study. More specifically, younger millennials aged 18 to 24 – who are usually recent college graduates – will have to save the longest at an average of 8.77 years in order to save enough for a 10 percent down payment on a home costing $221,600.
Retirees aged 65 and over will take, on average, about 7.37 years to save up for a down payment on a $291,000 home.
Americans aged 45 to 54 years old – who tend to be at their top earnings power — take the least amount of time to save up for a down payment. Still, it takes more than three-and-a-half years to save for that age group.
Here’s a breakdown of the years to save up for a down payment based on age:
- 18-24: 8.77 years (average monthly mortgage payment: $597)
- 25-34: 7.34 years (average monthly mortgage payment: $950)
- 35-44: 5.45 years (average monthly mortgage payment: $1,073)
- 45-54: 3.54 years (average monthly mortgage payment: $891)
- 55-64: 3.72 years (average monthly mortgage payment: $766)
- 65 and over: 7.37 years (average monthly mortgage payment: $532)
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 3.50 MBS) gained +17 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move sideways from the prior week.We had a very big week with a lot of big name economic data and longer term Treasury auctions. But it was falling oil prices and low inflation that drove rates for the week.
Black Gold, Texas Tea: Old Jeb is not going to be a millionaire very much longer. Oil prices resumed their slide with U.S. crude falling below $37 per barrel and Brent breaking below $40 for the first time since early 2009, amid fears the world was running out of capacity to store crude as a global glut intensifies. With falling commodity prices, this is very anti-inflationary and therefore good for long bonds.
The bond market largely ignored our domestic economic data and focused on oil as bond traders are shifting their bets (but its a small shift) into the “no rate hike camp” as they view the collapse of oil prices as offsetting any previous signs of inflation and making it difficult for the Fed to say that the dip in oil prices is “transitory” as they have in the past. This is shifting bond trader sentiment away from the “yo Adrian..its a lock that the Fed will raise rates” to “yikes…we might be on the wrong side of this trade and its time to start shifting our positions.”
Retail Sales: Were a mixed bag but still showed an overall improvement in monthly sales. The headline number missed by just one tick (0.2% vs est of 0.3%) and the Ex-Auto data was stronger than expected (0.4% vs est of 0.3%).
A key discretionary category, restaurants, shows yet another very strong gain, this at 0.7 percent in the month. Also showing sizable gains are electronics & appliances, clothing & accessories, non-store retailers (once again), and the general merchandise category where, despite a deflationary pull from falling import prices, sales jumped 0.7 percent in the month.
But there was weakness in Auto sales: Vehicle sales fell 0.4 percent in the month on top of October’s 0.3 percent decline. These declines are a bit of a surprise given steady readings in unit sales of vehicles which have been holding firmly at 12-year highs.
|What to Watch Out For This Week: