In Miami, 65% say down payments hold them back from buying a home: report
Down payments for a home are giving some potential buyers sticker shock.
In Miami, coming up with the down payment is holding back nearly 65 percent of renters from buying a home, according to a Zillow report. That’s lower than the national average of 70 percent, and lower than what renters reported in cities like Los Angeles, San Jose and San Diego.
Zillow surveyed 10,000 renters and homeowners about the housing market in their area and their views on homeownership. While the majority of Miamians struggle to save for a down payment, other perceived barriers came into play, too. Nearly 55 percent said qualifying for a mortgage is their No. 1 barrier to buying a house, 45.4 percent cited debt and 42.6 percent said job security kept them from fulfilling the quintessential American dream.
In Los Angeles, 72.2 percent of renters said that high down payments prevented them from buying homes, while 55 percent of the Angelenos surveyed couldn’t qualify for a mortgage, and nearly 44 percent of the region’s renters cited saddling debt. In New York, 56.2 percent of the people surveyed said the biggest hurdle to owning a home was the down payment.
Down payments typically range from 5 percent to 20 percent of a purchase price. Putting down 20 percent amounts to more than 66 percent of the national annual median household income, and in more expensive markets the down payment can equate to more than 180 percent of a household’s average annual income. The affordable housing inventory — especially in denser cities like Miami, Los Angeles and New York — hasn’t met the demand post-housing crash.
High rents aren’t helping hopeful homebuyers save, either. New York, Miami and Los Angeles are all among the 10 most expensive cities to rent an apartment. In the Miami area, a one-bedroom apartment costs about $1,800 a month and two-bedrooms cost $2,500, according to apartment rental website Zumper.
During the last quarter of 2016, Americans spent the highest share of their incomes on mortgage payments since 2010, Zillow said earlier this year, estimating that a typical homebuyer could expect to pay 15.8% of their income on a mortgage.