Housing affordability has deteriorated sharply in major U.S. cities. New analysis reveals that buyers in several metropolitan areas now need more than 50 years of continuous saving to accumulate a typical 20 percent down payment on a median-priced home.
The calculation assumes a buyer saves 10 percent of their gross annual income each year without touching that money. In high-cost markets like San Francisco, New York, and Los Angeles, the timeline stretches even longer. San Francisco tops the list, requiring savers to set aside money for roughly 70 years to reach a 20 percent down payment on a median home priced around $1.3 million.
This reflects a fundamental shift in the housing market. Home prices have climbed faster than wages for two decades. The median home price nationwide stands near $430,000, while median household income sits around $74,000. That gap creates an impossible math problem for first-time buyers.
Most buyers respond by putting down less than 20 percent. Putting down just 10 percent shrinks the timeline considerably in some markets. However, smaller down payments trigger private mortgage insurance, or PMI, which increases monthly payments. A buyer with a 10 percent down payment on a $400,000 home pays roughly $150 to $300 extra monthly for PMI protection.
First-time buyers also tap family money. The National Association of Realtors reports that 27 percent of recent first-time buyers received a gift from family members to cover down payment costs. Without parental help, homeownership moves further out of reach for young adults.
Renting remains the only option for millions of Americans in expensive cities. In San Francisco, someone earning the median household income and saving 10 percent annually would need to wait until age 78 to buy a home. Building wealth through homeownership becomes impossible