New York City Tops List as Toughest Market for First-Time Homebuyers

New York City has been identified as the most challenging major market in the United States for individuals aspiring to purchase their first home. A recent analysis by Rocket indicates that a typical household in the city would need an estimated 65.2 years to save for the required down payment.

The study found that first-time buyers in New York City commonly put down $265,000, representing 30% of the median home purchase price of $883,333. This substantial down payment requirement contributes significantly to the extended savings timeline.

This figure places New York City well ahead of other expensive housing markets. San Francisco requires approximately 57.2 years for a typical household to save a median down payment of $400,000 on a $1.5 million home. Los Angeles follows, needing 41.5 years to accumulate a median down payment of $170,500 for an $852,500 home. Boston demands 37.8 years, with a median down payment of $185,000, while Anaheim and San Jose, both in California, require 33.6 years.

The analysis assumes a consistent annual savings rate of 5% of household income. Rocket combined 2024 Census household income data with down payment information from its first-time buyer mortgage customers between May 2025 and May 2026.

The lengthy savings period for New York City highlights a substantial gap between typical household income and the required down payment. The median household income used in the analysis for New York was $81,228, meaning a 5% annual saving would amount to just over $4,000 per year.

In stark contrast, markets like Warren, Michigan, present a more attainable scenario. There, a median down payment of $8,797 on a $175,940 home could be saved in approximately 3.1 years. Detroit followed at 3.9 years, with a median down payment of $7,600 on a $152,000 home.

The disparity is attributed not only to higher home prices in some areas but also to the larger percentage of the purchase price buyers are required to put down. New York City buyers, for instance, put down a median of 30%, which is six times the 5% share seen in markets like Detroit and Warren.

Market dynamics, such as the stringent requirements in New York's co-op and condo markets, often mandate down payments ranging from 20% to 30%, according to Redfin agent Jason Warner. This can effectively shift the profile of a first-time buyer, often pushing them into their late 30s or early 40s.

A larger down payment can also strengthen an offer in competitive markets, making it more attractive to sellers.

Nationwide, first-time homebuyers face ongoing affordability challenges. A separate Redfin analysis indicated that the typical US homebuyer put down $64,000, or 15% of the purchase price, in March. This is double the pre-pandemic dollar amount, largely due to soaring home prices.

While affordability has seen some recent improvements, a significant income gap persists. Redfin estimated in June that a household needed to earn approximately $109,800 annually to afford a typical U.S. home, compared to an estimated median household income of about $87,600. For New York City, this gap is even more pronounced, with an estimated required income of $233,000 against a median household income of around $98,000.

For prospective buyers struggling with these timelines, financial assistance from family has become a more common part of the home-buying process, with nearly a quarter of recent young homebuyers utilizing family funds for their down payments, according to a Redfin survey cited by Rocket.