Homebuyers Are Spending Years Saving for 20% Down. They May Not Have To

Across the 50 largest U.S. metros, saving for a 20% down payment and closing costs takes a typical two-income household about 6.5 years on average. That is nearly twice as long as the same benchmark took in 2015.

The gap between markets is wide. In Pittsburgh, the most affordable major metro in the analysis, a typical two-income household would need about 5.6 years to save for 20% down and closing costs. In San Jose, the least affordable, that same goal takes roughly 21 years.

The findings come as home prices remain historically high. The median existing-home sales price reached $434,100 in July, according to the National Association of Realtors, marking the 37th straight month of year-over-year price growth.

There are signs of short-term relief. NAR’s July report showed affordability improved slightly from a year earlier, as income growth outpaced price growth over that single-year period. But the longer-term trend remains much tougher for buyers: the cash needed for a 20% down payment has grown far faster than incomes over the past decade.

“Home prices have climbed steadily for years, raising the bar on how much cash buyers think they may need before making an offer,” said Chris Birk, vice president of mortgage insight at Veterans United Home Loans. “For buyers who know their options, the upfront hurdle can be much lower than many realize. VA and USDA loans require no down payment at all, and FHA and conventional loans can require as little as 3.5% or 3% down. For a lot of buyers, that’s the difference between years of saving and getting into a home sooner.”

The analysis uses U.S. Census Bureau American Community Survey income estimates, National Association of Realtors home price data and Veterans United’s analysis of 229 metros. It estimates how long it would take a typical two-income household to save for down payment and closing costs across the 50 largest U.S. metros.

The report compares four common paths into homeownership: a VA or USDA loan with no down payment, an FHA loan with 3.5% down, a conventional loan with 3% down and a traditional 20% down payment.

The Most and Least Affordable Major Metros

The analysis compares median home prices with median household incomes across the 50 largest U.S. metros, then estimates how long a typical two-income household would need to save for 20% down plus closing costs.

Pittsburgh ranked as the most affordable major metro, followed by Cleveland, St. Louis, Detroit and Oklahoma City. On the other end, San Jose, Los Angeles, San Francisco, San Diego and Miami were the toughest places to save for a 20% down payment.

What the Gap Means for Buyers

A 20% down payment can still be a smart move for buyers who can afford it comfortably. It reduces the loan amount, can eliminate private mortgage insurance and gives buyers more equity from day one.

But in many markets, especially high-cost ones, 20% down is no longer a practical starting line. It can turn buying a home into a years-long savings project before a buyer ever makes an offer.

Other loan options require far less upfront cash:

• VA loans, for eligible service members, veterans and surviving spouses, require no down payment.

• USDA loans, for eligible borrowers and properties in qualifying rural and suburban areas, require no down payment.

• FHA loans can require as little as 3.5% down.

• Conventional loans allow qualifying buyers to put as little as 3% down.

These options do not erase closing costs. Buyers may still need cash for expenses like the loan origination fee, appraisal, title insurance, prepaid taxes and homeowners insurance. But those costs do not always have to come entirely out of pocket. Seller concessions and lender credits can sometimes cover part or all of the closing costs, and that is especially common with VA loans.

The cash difference between closing costs only and a full 20% down payment grows as home prices rise. In Pittsburgh, that difference is about $46,000. In San Jose, it exceeds $372,000. Nationally, on the median-priced home, it is roughly $80,500.

“In the most expensive markets, the loan type is not just a convenience,” Birk said. “It can be the difference between buying this year and not buying for a decade.”

The Wait Has Grown Longer Since 2015

This challenge did not appear overnight. A separate Veterans United analysis of 229 U.S. metro areas found that saving for a 20% down payment and closing costs took a typical two-income household about 3.48 years in 2015. By 2025, that figure had climbed to 6.49 years.

The Bottom Line

Across the 50 largest U.S. metros, saving a full 20% down payment takes years, not months. Even in the most affordable major markets in this analysis, a typical two-income household faces a multi-year timeline.

For buyers who cannot or do not want to wait that long, VA, USDA, FHA and low-down-payment conventional loans can offer a much faster path. The right option depends on eligibility, location, credit profile and long-term financial goals, but the math is clear: lowering the upfront cash requirement can dramatically shorten the time it takes to get into a home.

Methodology: Median household income figures reflect U.S. Census Bureau American Community Survey 2024 one-year estimates, as published in "Household Income in States and Metropolitan Areas: 2024" (ACSBR-025). Median home prices reflect National Association of Realtors fourth-quarter 2025 existing single-family home sales data, as published in NAR's quarterly Metropolitan Median Area Prices and Affordability report. Figures for both were checked against these primary releases. Time-to-save estimates assume a two-income household saves 12.4% of gross income annually, a rate calibrated to match the national closing-costs-only timeline from Veterans United's companion 229-metro study. Closing costs are calculated as 3% of the loan amount rather than the home price. Because a $0-down VA or USDA buyer finances nearly the entire purchase price, their closing costs are calculated on that larger loan amount. A 20%-down buyer finances only 80% of the price, so their closing costs are calculated on that smaller loan, with the down payment added on top. The historical comparison to 2015 and 2025 draws from a separate Veterans United analysis of 229 U.S. metros using Zillow home value data, Census American Community Survey income data and Economic Policy Institute cost-of-living data. That analysis uses a different home price measure, closing cost assumption and savings rate methodology than the 50-metro analysis above, so the two figures illustrate the same trend but are not directly interchangeable.

Note on NAR data: NAR's full metro-level price tables carry usage restrictions for non-members. Anyone republishing the complete 50-metro breakdown should confirm Veterans United's access terms with NAR directly.