North Columbus News

Nearly half of renters report having no savings for a down payment, according to a new study. The research highlights how consistent, small daily savings can make homeownership more attainable.

In Ohio, potential home buyers may find it easier to save for a down payment compared to other regions. Cleveland ranks among the top three most affordable markets for saving up for a 15% down payment on a median-priced home, following Jackson, Miss., and Detroit, Mich.

The study by MutualFund.com surveyed approximately 1,500 renters and found that 46% have no savings for a down payment. A similar percentage believes they will never be able to afford a home. However, the study suggests that saving as little as $25 per day could help achieve homeownership within five years.

Hopeful first-time buyers face challenges due to rising home prices and mortgage rates. Many are held back by the misconception that a 20% down payment is necessary. According to the National Association of REALTORS®’ 2024 “Home Buyers and Sellers Generational Trends” report, the median downpayment is actually 15%, with younger buyers (ages 25-33) averaging around 10%.

MutualFund.com researchers analyzed median home prices in the nation’s 170 largest cities to determine daily and annual savings required over five years for a 15% down payment. One-third of these areas require saving $25 or less per day.

Several Ohio cities were identified as requiring minimal daily savings:

Cleveland:

- Median home price: $110,545

- Down payment needed: $16,581.75

- Annual savings goal (5 years): $3,316.35

- Daily savings goal (5 years): $9.09

Toledo:

- Median home price: $123,237

- Down payment needed: $18,485.55

- Annual savings goal (5 years): $3,697.11

- Daily savings goal (5 years): $10.13

Akron:

- Median home price: $133,601

- Down payment needed: $20,040.15

- Annual savings goal (5 years): $4,008.03

- Daily savings goal (5 years): $10.98

Cincinnati:

- Median home price: $243,399

- Down payment needed: $36,509.85

- Annual savings goal (5 years): $7,301.97

- Daily savings goal (5 years): $20.01

Columbus:

- Median home price: $247,174

- Down payment needed: $37,076.10

- Annual savings goal (5 years): $7,415.22

- Daily savings goal (5 years): $20.32

In contrast, Sunnyvale in California's Silicon Valley requires the highest daily saving at approximately $173 for a similar downpayment within five years.

The report also advises potential buyers to consider high-yield savings accounts or money market funds to increase their interest earnings over time and review their monthly budgets for additional saving opportunities.

Down payment assistance programs could further ease the path to homeownership through federal and state initiatives as well as lender-specific low-down-payment options.

Melissa Dittmann Tracey is an award-winning journalist specializing in real estate news and trends.

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