Mortgage rates topping 7% is the latest sign of how hard it has gotten to buy a first house, with aspiring owners already facing sky-high prices.A new analysis out Thursday shines a light on yet another growing obstacle: the amount needed to close a home loan."Over the last seven years, the time to save up that down payment and closing costs has doubled," said Mike Calhoun, president of the Center for Responsible Lending, a research nonprofit that promotes economic opportunity.
The report was released by the center's Julian Bond Institute.Since 2019, the last time the center made the same calculation, home prices have shot up, inflation spiked and has remained stubbornly high, and the rising cost of food, gas, healthcare and more has strained family budgets.Closing costs on a home loan have also ticked up, driven in part by rising homeowners insurance.Amid all this, renters' incomes have not kept pace, and personal savings rates have dropped.Today, the center calculates that for a median-income renter household, it would take a "staggering 16 years" to save up a down payment and closing costs for a starter home.
That's twice as long as in 2019.And it would take even more time — 21 years — for a median-income Black renter household.That kind of time frame upends a main reason that many look to buy in the first place.
As the analysis notes, "young children at the time the family starts saving may have left the household — for higher education or the workforce — before the family will have saved enough to purchase their first home."The report also narrows its calculations to middle-income households — making roughly $50,000 to $120,000 — whose members are more likely to be viable homeowners.For them, the savings time has also doubled, to 12 years.For front-line workers, such as police officers, firefighters, EMTs, nurses and teachers, the researchers find that "the years to save has at least doubled and now ranges from 10 to 13 years."As stark as those ...