Iowa has some of the nation’s best metros to save for your first home.
With Cedar Rapids landing in third place in the Top 20, rent-payers in Cedar Rapids could be homeowners by the end of 2023, according to the most recent study from RentCafe.
Besides Cedar Rapids, Des Moines ranks 10th in the study and Waterloo comes around at 15th. Here are some highlights for each market from the RentCafe study:
- A two-person family living in Cedar Rapids needs to save for a down payment for only one year and nine months. Considering that the average starter home price is $117,181, they need to put aside a minimum of $23,436. The average family in Cedar Rapids can save 17% of their income, meaning that they could meet their resolution by 2023.
- Down payment in Des Moines has the highest rates in the state, but the wages and living costs still allow residents to save in a fair amount of time, compared to other metro areas with cheaper housing. It will take only two years and nine months to make the necessary savings of $30,944 for a down payment, taking into account that a two-person family here is able to put aside 14% of the income.
- Homeownership in Waterloo is still attainable in less than three years. Even if the savings are lower in Waterloo than in the other two Iowa metros, starter home prices are more affordable, going as low as $91,403. This makes Waterloo-Cedar Falls a place where would-be buyers could move into their first home in two years and 10 months.
2021 has been a challenging year for homebuyers who competed for scarce inventory and record prices. And times are even harder for first-time buyers — most of whom are Millennials and Gen Zs in the early stages of their careers and who have to save for years in order to afford a down payment on a home.
Specifically, coming up with 20% down for a first home can be difficult, even when applying popular saving methods such as the “50-30-20,” which is easier in theory than in practice. But, although it may seem like “mission impossible” for some, RentCafe determined to find out where renters could purchase their first home in the shortest amount of time.
To come up with the best metros to buy your first home, RentCafe used data from the U.S. Census Bureau, Economic Policy Institute, BLS, and Zillow to calculate the number of years it would take a two-person family to save for the down payment on a starter home.
There are 64 metro areas where an average two-person family can save for a 20% down payment on a starter home in less than 10 years. All in all, these areas make up 36% of the 174 metros analyzed. In all of the top 20 metros, it would take three years or less to achieve the dream of homeownership.
Here’s a summary of the Cedar Rapids market from the RentCafe study:
“This small, Midwestern metro in Iowa is one of the most diverse economic landscapes in the Midwest. Its affordable real estate, extensive transportation network and low business taxes attracted companies from a broad mix of industries (including defense, finance, and food production). Starter home prices here are also low, making it attractive for families and young professionals alike. Plus, the lively pubs, restaurants and events in places like NewBo, the Czech Village and the up-and-coming Kingston Village provide a big-city feel.”