It will take nearly a decade to save for a down payment in Raleigh
Add Axios as your preferred source to
see more of our stories on Google.
It will take Raleigh buyers an average of 9.4 years to save up for a 10% down payment on the typical home, Zillow data shows.
- That accounts for saving 5% of the median household income every month.
Why it matters: A double-whammy of rising mortgage rates and increasing prices has created a growing affordability issue for homeowners in the Triangle.
- Rising rates mean it now takes 40% of the area's median household income to afford monthly payments on a 10% down payment, according to Zillow.
- That's up from 22.8% at the onset of the pandemic.
What they're saying: "We've got some issues here" for first-time homebuyers, said Stacey Anfindsen, an appraiser who writes Triangle Area Residential Realty market reports.
- Ballooning home prices have caused the average monthly payment to nearly double in the past two years, he noted in his most recent report, creating real barriers for those only putting 5% to 10% down.
- "The basic answer is we need more shelter and … to figure out some way to create shelter that does not start at $500,000, otherwise it will be like Austin in a couple years," he added.
State of play: The share of first-time buyers in the U.S. has shrunk to a record low, according to the National Association of Realtors, Axios' Sami Sparber reports.
- First-timers are also waiting longer to buy; the median first-time American buyer age jumped from 33 to 36 from 2021 to 2022, the latest data shows.
Between the lines: Anfindsen said that first-time homebuyers are having to change what neighborhoods they look at and compromise on how many bedrooms and bathrooms they want.
- "You're going to have to accept that anything bigger [than 1,000 square feet] is going to cost a lot more," he said.
- For those that can, living at home with parents or multiple roommates could help with saving for a down payment, he added.
- It's a different story, he said, if you look at homes more than 45 minutes outside of the main cities in places like Johnston and Lee counties. That might be doable for remote workers, he said, "but that doesn't help the service workers in Cary."
What's next: The city of Raleigh is hosting a homeownership fair on July 15 to highlight some of its assistance programs, including loans that help with down payments and closing costs or a gap in financing.