Consumer Affairs Claims This State Is Best For Saving A Down Payment On A Home

If you're tired of renting, but you're struggling to save the money to buy a house, you might consider affordable housing alternatives to cut mortgage costs, such as a tiny house. However, if reducing your living space simply isn't realistic, you may want to consider moving. If so, pay close attention to states where homes are most affordable.

ConsumerAffairs, which uses telephone interviews and consumer review submission forms to collect information aimed at helping consumers make product and service choices, did some research to help with your house choice. After collecting data on median numbers for household income, home prices, local taxes, and cost of living in each state, ConsumerAffairs determined Iowa was the state where consumers could save a 10% down payment for a home the fastest.

One of the most common myths about buying a home is that you must save for a 20% down payment. However, using a 10% down payment is an option to make the process more affordable faster, especially if you don't own a home that has equity you can use to help with your purchase. In fact, the National Association of Realtors estimates the average down payment for American first-time home buyers is only 9%. If you believe you'd like to buy a home with a 10% down payment, ConsumerAffairs says it may be worth checking out a map of Iowa to find a place where your savings will go farther.

The biggest advantages Iowa offers the average resident who wants to save up to buy a home is its lower living expenses compared to average states and its low selling prices for an average home. The median sale price for a home in Iowa is $227,500, according to Redfin, which is the lowest among all 50 states. For comparison, the median sale price for a home in California is $785,200, which is the highest. Additionally, Iowa's cost of living ranks seventh among the 50 states, according to the U.S. News. If you're trying to buy a house when you're broke, it certainly helps to shop for a house in an area where average home prices and the cost of living are lower than average. The income opportunities in that area compared to the cost of living is also important to consider.

Using its calculations, ConsumerAffairs estimates that the average Iowa resident could save 10% to put toward a house in eight years and nine months. The second-place state on the list (Ohio) requires an estimated nine years and 11 months to save 10% for a house. For comparison, the worst-ranked state on the ConsumerAffairs list (California) requires average residents to save for more than 25 years to reach a 10% down payment to purchase an average house. In making its calculations, ConsumerAffairs estimated people would place one-tenth of their monthly discretionary income toward saving for a down payment.