The total savings breaks down to an average of $5,965 on the down payment for a median-priced home, and an average savings of $11,801 on monthly house payments over the life of the loan for a median-priced home, according to the report.
“Saving for a down payment can be difficult for prospective first-time homebuyers given the absence of substantial wage growth in recent years combined with the burden of student loan debt many are struggling under,” says Daren Blomquist, senior vice president at RealtyTrac. “Even just a 3 percent down payment requires 14 percent of annual wages on average across the 513 counties we analyzed, and in 67 counties a 3 percent down payment requires more than one-fifth of annual wages.
The study shows that the following markets are where buyers who use down payment assistance programs have the biggest total dollar savings compared to buyers not using down payment assistance: Kauai County, Hawaii ($80,148 total savings over the life of the loan); Placer County, California, in the Sacramento metro area ($78,539); San Francisco County, California ($77,411); Orange County, California in the Los Angeles metro area ($74,268); and Shasta County (Redding), California ($70,806).
“Home ownership programs not only help buyers overcome the initial cost of purchasing a home, but also produce a compounding positive impact on the home owner’s saving and wealth-building capability,” says Rob Chrane, CEO at Down Payment Resource. “In fact, these programs are now the last frontier in the fight to preserve home ownership affordability. Rates are never going to be substantially lower, and home prices continue to trend higher.”