10 states where it’s fastest to save up a 10% down payment on a home

Barring an unexpected cash infusion, saving money for a down payment on a house can take years; In some US states, this process can take decades.

A. new analysis A study from ConsumerAffairs estimates how long it would take to save on a 10% down payment in each state by comparing each state’s median household income to its median home price, average tax burdens, and basic living expenses.

In Iowa, it would take approximately 8.7 years to save enough for a 10% down payment; which is the fastest of all states. In California, the estimate is 25.1 years, longer than in any other state. According to the study, the average duration across all 50 states is 14.4 years.

These timelines are based on what the study calls “fractional saving,” which assumes a household sets aside 10% of its discretionary income each year.

Dayna Edens, media relations manager for ConsumerAffairs, told CNBC Make It that this approach was chosen because “it’s really the way people save money.” “Nobody is putting every penny aside for a down payment on a house they haven’t shopped for yet.”

Edens says a 10% down payment, rather than the commonly recommended 20%, is also chosen as a more realistic goal for first-time buyers.

Here’s a look at the 10 states where it would take the least time to save a 10% down payment on a home, based on each state’s median income, median home price, and estimated household savings.

The most important factor in affordability is the house price. All but one of these states have median home prices below the national average of $410,800. According to US Census data.

Median household income in eight of 10 states is roughly in line with the national average of $83,730. According to US Census data. The shorter timelines largely reflect lower house prices, not unusually high earnings.

This model also holds in many high-income states. In places where the median household income exceeds six figures, such as California and Hawaii, timelines are longer than in states with lower-cost homes. In these states, higher costs of living, especially housing, can offset the benefit of higher wages.

Annual taxes and essential expenses also affect how much discretionary income a household can save. Tax burdens vary by about $15,000 from state to state, and the annual cost of basic needs ranges from the mid-$20,000s to $40,000, according to the study.

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