Zillow: 2018 Buyers Will Need to Save More
November 9, 2017
The median home will be worth $6,275 more a year from now, according to new data released by Zillow, which also forecasts that the average buyer will need to save an additional $105 a month, or $1,260 total over the next year, to account for the future costs of a 20 percent downpayment.
In the nation’s more expensive housing markets, the costs will be much higher. Zillow noted that home values in San Jose are expected to rise as much as $35,934 by this time next year, thus requiring the average buyer to have $7,188 more for a downpayment on the median home than they would today—which would be achieved by putting away an additional $599 a month just to keep up with home value appreciation, let alone whatever else is needed for the downpayment itself.
"Sky-high rents and rising home prices are putting first-time buyers in a bit of a catch-22," said Svenja Gudell, Zillow Chief Economist. "Buying now with a low downpayment can be riskier, and the offer may not be considered as competitive by the seller. However, a renter who saves for another year to reach a larger downpayment may find that the home they love today is outside their budget a year from now. For those considering buying in the next year, getting into the market today may make more financial sense than they think."
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