In today’s housing market, future homeowners must compromise to save for a down payment. One way to put aside money for a first home? Give up a little space.
In fact, RentCafe found that renters who dream of transitioning to homeownership could save an average of $3,735 per year by simply downsizing by just one bedroom — a sacrifice many renters are jumping on. Nearly 4,000 RentCafe website visitors revealed that 36% of renters were willing to use this method in order to afford their first home.
So where in the nation can renters save up the fastest for a down payment by surrendering one bedroom in their current rental? Well, Chicago secured the No. 4 spot on the Top 50 list, despite having some of the smallest apartments nationwide.
Not only is Chicago the third-largest city in the U.S., it’s also a hot spot for young people. Renters here could save $8,916 per year if able to adjust to one less bedroom, meaning they’d be able to afford a down payment for a starter home in just over two years. The median price of homes is much higher than the preceding three locations on RentCafe’s list, but the higher income earned by Chicagoans makes saving for a down payment almost as achievable as it is in Jackson, MS.
Can you guess which city landed at No. 1 on RentCafe’s list? Hint: It’s also in the Midwest.
Yep. Renters in Dayton, Ohio are the closest to ownership. The median price of starter homes, $57,652, combined with the yearly savings derived from downsizing a rental, $3,168, would make it possible for a renter to afford a down payment in a little over a year and a half, based on the report.
And contrary to Chicago, Dayton is also one of the places with the most apartment space per person, which makes downsizing less of a challenge.
Other Midwest locations to make the Top 20 on RentCafe’s list include Lansing, Michigan; Cleveland, Ohio; and Columbia, Missouri.
Randolph is a Multifamily Investment Sales Broker with eXp Commercial servicing Multifamily Buyers and Sellers in the Greater Chicago Area.