A recent RealtyHop study has shed light on just how long it takes to save for a 20% down payment in Phoenix and other Arizona cities. The results? Not encouraging for first-time buyers—but crucial information for investors.
Key Findings from the Study
- Saving for a down payment takes years
- 5+ years in Gilbert (fastest in AZ)
- 6+ years in Phoenix
- Nearly 7 years in Scottsdale
- 14+ years in Los Angeles (yikes!)
- Home affordability gap
- Median household income in Phoenix: $77,041
- Income needed to afford the median home price of $470,500: $144,798
- Homeownership is becoming a luxury, not a milestone
- The financial gap between renters and owners is massive
- Homeowners have a median net worth 75X greater than renters
- The longer buyers wait, the wider this gap grows
- Mortgage rates remain a challenge
- High interest rates + rising home prices = difficult market
- Even though prices have stabilized, buyers still struggle to afford monthly payments
- Investors take note: renting is here to stay
- Many buyers are delaying homeownership
- More demand for rentals = higher rental income potential
- Property management is becoming even more critical
Tips for First-Time Buyers
- Consider first-time homebuyer programs for assistance
- Look into house hacking (rent out part of your home to offset costs)
- Improve your credit score to qualify for better mortgage rates
- Explore low down payment options—FHA, VA, and conventional loans with 3-5% down
What This Means for Investors
- Longer time to save = higher rental demand
- Affordability crisis makes rentals more attractive
- Property values may continue rising, making now a smart time to buy rental properties
Final Thought
Whether you’re a first-time buyer or a seasoned investor, this study reinforces the importance of long-term planning. Homeownership may take time, but smart investing can help bridge the gap.
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