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Saving for a down payment now takes more than a decade in these 6 U.S. states

Home prices have pulled away from paychecks in every part of the country. SmartAsset found places where the wait to buy now stretches past a decade

Spenser Sembrat / Unsplash

A home down payment used to be a few years of disciplined saving. Now it's closer to a decade in large parts of the country, and the wait keeps growing even for households earning well above the median. Wages have climbed over the past ten years, but in the places people most want to live, home prices have climbed faster still, pulling the size of a typical down payment further out of reach with each year that passes. A household doesn't need a bad year to fall behind. Steady saving isn't enough either. Home prices are rising faster than paychecks, so the amount needed keeps growing before most households can save enough to reach it.

The math behind a down payment hasn't changed. Most lenders still expect 20% down to avoid extra insurance costs, so the down payment's size rises and falls with the price of the home itself. When a home's price climbs by hundreds of thousands of dollars over a decade, the down payment climbs by tens of thousands right along with it, and a household has to save far more before a lender will even discuss a mortgage. Income growth can close some of the distance, but in much of the country, pay hasn't kept pace with what homes now cost, leaving the saving period longer than it was ten years ago.

SmartAsset compared typical home values and median household income in every state in 2016 and 2026 to calculate how many years of saving it would take a household to set aside a 20% down payment, assuming it saves 10% of its income each year. The firm's analysis found six states where the wait now stretches past 11 years, more than double what it takes in the fastest-saving parts of the country. It also found that saving for a down payment on minimum wage alone is effectively impossible almost everywhere, taking well over a decade in even the most forgiving states.

Spenser Sembrat / Unsplash

Hawaii tops SmartAsset's list by a wide margin. A household earning the state's median income of $106,236 now needs 15.6 years to save a 20% down payment on a typical home, longer than anywhere else in the country. The typical home cost $533,475 in 2016. It costs $830,219 today, a jump of more than 55% in a single decade, while income in the state climbed a slower 43% over the same stretch. For a minimum-wage worker, the math turns almost theoretical. Saving alone at Hawaii's minimum wage would take 49.9 years before a down payment is within reach. Few careers last that long.

Hawaii's home prices reflect a housing market that can't expand the way most of the country's can. The islands have almost no undeveloped land left near existing job centers, and strict conservation and agricultural zoning keeps much of what remains off-limits to new construction. Building materials and labor have to travel by ship to reach the islands, adding 20% to 30% to construction costs compared with mainland projects, and permitting for new housing in Hawaii takes more than three times the national average. Military families stationed at bases like Pearl Harbor and Schofield Barracks add steady demand that doesn't ease up even when the broader economy slows, and buyers from the mainland and overseas compete for the same limited inventory as local residents.

None of this leaves much room for a........

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