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Would You Downsize for a Down Payment? Here Are the Cities Where You Can Get on the Property Ladder in Less Than 5 Years by Giving Up 1 Bedroom

Key Takeaways:

  • One in three renters surveyed would be willing to sacrifice space for their homeownership dream.
  • Downsizing by one bedroom would allow renters in 50 cities to save up in less than five years for a down payment on a starter home.
  • Dayton, OH, Philadelphia, PA and Jackson, MS are the top places where renters could save up the fastest by downsizing their rental.
  • There’s one upside to living in pricey New York City: renters who give up one bedroom can put aside an impressive $20,000 per year and would be able to invest in their first home in less than three years.

In a white-hot housing market, renters who are dreaming of their first home must adapt and compromise on one front or another. And, when saving becomes tricky, one way to put aside money for a first home is to give up a little bit of space. In fact, we found that renters who dream of transitioning to homeownership could save an average of $3,735 per year by simply downsizing by just one bedroom — and many renters are willing to do just that. A recent survey of 3,659 rentcafe.com website visitors revealed that 36% of renters were willing to use this method in order to afford their first home.

With this in mind, we analyzed nearly 200 cities across the nation to determine the places where renters could save up the fastest for a down payment on a starter home, by simply giving up one bedroom in their current rental. Notably, it didn’t matter whether renters were downsizing from a three-bedroom to a two-bedroom apartment, opting for a one-bedroom instead of a two-bedroom apartment, or going for a studio rather than a one-bedroom rental. The yearly savings from all of these scenarios helped us calculate the amount of time one would need to save for a 10% down payment on a starter home in the same city.

 

According to our analysis of apartment rents by the number of bedrooms and starter home prices, Dayton, OH; Philadelphia, PA; Jackson, MS; Chicago, IL; and Tuscaloosa, AL, are the top five cities where renters who downsize could save up the fastest for a down payment.

Sacrificing Space While Chasing the Dream of Ownership Pays Off in Less Than 2 Years for Renters in Dayton, OH

Renters who are willing to compromise a little bit on space could save an average of $3,735 per year, nationally — which is fairly significant, especially in today’s economic environment. Essentially, that equates to an average of six years and seven months to save enough for a down payment on a first home.

In particular, renters in Dayton, OH are the closest to ownership. Here, the median price of starter homes — combined with the savings derived from downsizing their rental — would make it possible for them to afford a down payment in just one year and nine months.

And, while we’re on the topic of savings, you wouldn’t believe just how much New Yorkers could save per year if they compromised and gave up one bedroom — a whopping $20,000, the biggest yearly savings among the cities analyzed. Whether that justifies downsizing in NYC is up to renters to decide.

Without further ado, here are the top U.S cities where renters could save the fastest for a down payment by simply downsizing their apartment. Amazingly, in some cases, this strategy could help turn renters into homeowners in less than two years!

1. Dayton, OH

  • Time to save for a down payment: 1 year, 9 months
  • Median starter home price: $57,652
  • Down payment value: $5,765
  • Savings per year after downsizing: $3,168

Renters in Dayton, OH have the best chances of becoming homeowners in less than two years just by downsizing. That’s right: The sixth-largest city in Ohio makes it easy for renters to fulfill their homeownership goals due to a low starter home price, which accounts for an affordable down payment value of only $5,765. Dayton is also one of the places with the most apartment space per person, which makes downsizing less challenging here than it would be in other cities. Pair that with a dense suburban feel and an affordable cost of living, and it’s safe to say that owning a home in Dayton can literally be a dream come true for many.

2. Philadelphia

  • Time to save for a down payment: 1 year, 10 months
  • Median starter home price: $142,288
  • Down payment value: $14,229
  • Savings per year after downsizing: $7,416

Also coming in under the two-year mark, Philadelphia is the runner-up in the race toward achievable homeownership. Here, renters could become owners in one year and 10 months, without compromising anything other than space. Although the median starter home price is not the most affordable on our list, the fact that downsizing in Philly adds up to $7,416 in savings per year makes the transition from renting to owning a real possibility for many.

3. Jackson, MS

  • Time to save for a down payment: 2 years
  • Median starter home price: $36,413
  • Down payment value: $3,641
  • Savings per year after downsizing: $1,800

Nothing says Southern hospitality like affordable housing and homeownership that's a reality instead of a distant dream. And, for renters in Jackson, MS, saving up for a down payment on their first home can be achieved in exactly two years. With a low median starter home price of only $36,413 and, as a result, a more-than-decent down payment value, Jackson residents can easily become homeowners in the state capital. The city is also known for its strong service industry, which provides stable jobs for its residents.

4. Chicago

  • Time to save for a down payment: 2 years, 3 months
  • Median starter home price: $201,848
  • Down payment value: $20,185
  • Savings per year after downsizing: $8,916

Chicago is not only the third-largest city in the U.S., but also a highly coveted place to be — and not just because of its unique architecture and deep-dish pizza. Renters here could save $8,916 per year if they gave up one bedroom, and that means that they'd be able to afford a down payment for a starter home in two years and three months. Granted, the median price of such homes is much higher than the top three locations on our list, but the income that Chicago residents earn here makes saving for a down payment almost as achievable as it is in Jackson, MS.

5. Tuscaloosa, AL

  • Time to save for a down payment: 2 years, 3 months
  • Median starter home price: $122,221
  • Down payment value: $12,222
  • Savings per year after downsizing: $5,292

While Tuscaloosa is mostly known for being home to the University of Alabama, it's also known for its low cost of living and affordable housing. In fact, this Southern gem competes with Chicago when it comes to how long it would take for renters to save for a down payment for a first home if they downsized by one bedroom: By saving $5,292 per year, renters in Tuscaloosa could afford the 10% down payment for a $122,221 median-priced starter home in two years and three months.

6. Detroit, MI

  • Time to save for a down payment: 2 years, 3 months
  • Median starter home price: $45,478
  • Down payment value: $4,548
  • Savings per year after downsizing: $1,956

Detroit is another one of the top places where renters could move up to homeownership by downsizing their apartment. While it will only save a yearly amount of $1,956, the low median starter home price of $45,478 makes the transition relatively fast. Just like in Chicago and Tuscaloosa, renters in Detroit could save for a down payment in just two years and three months.

7. Birmingham, AL

  • Time to save for a down payment: 2 years, 6 months
  • Median starter home price: $55,125
  • Down payment value: $5,513
  • Savings per year after downsizing: $2,172

In the largest city in Alabama, it takes only two and a half years to save for a $5,513 down payment. Birmingham is another Southern hotspot where renters could easily transition to ownership by giving up one bedroom. This would generate yearly savings of $2,172 — which might not seem like a lot, but the city's affordable housing and the median starter home price of $55,525 makes those savings truly count.

8. New York City, NY

  • Time to save for a down payment: 2 years, 7 months
  • Median starter home price: $531,117
  • Down payment value: $53,112
  • Savings per year after downsizing: $20,148

It would take renters in New York City only two years and seven months to save up for a down payment on a first home. For those who are able to sacrifice a bedroom, the city's high rents can translate into high savings when downgrading. Specifically, giving up a single bedroom in New York City could save renters a whopping $20,148 per year! In theory, that makes it possible to own a starter home here in less than three years — even considering the high price of starter homes ($531,117). Of course, starter homes in New York might be harder to find than in other cities. And, compromising on space here is also likely to be challenging as New York's apartments are some of the smallest in the country.

9. Greenville, NC

  • Time to save for a down payment: 2 years, 8 months
  • Median starter home price: $125,894
  • Down payment value: $12,589
  • Savings per year after downsizing: $4,656

Greenville is not only North Carolina’s county seat, but also the home of East Carolina University and the scene of a booming job market. Plus, in 2021, Greenville was named the best city in the nation for Gen Z renters. Those are all good reasons for people to rent or own in Greenville. Even better: Climbing the property ladder is achievable in less than three years — two years and eight months, to be exact. And, although the 10% down payment on a median starter home is around the $12,000 mark, the fact that downsizing by one bedroom could help renters save $4,656 per year certainly brings them closer to fulfilling their homeowning dreams.

10. Mobile, AL

  • Time to save for a down payment: 2 years, 9 months
  • Median starter home price: $81,270
  • Down payment value: $8,127
  • Savings per year after downsizing: $2,916

In a recent analysis, we revealed that Mobile, AL was one of the best cities in the country for renters and also one of the top 10 cities that offer the most apartment space. That means that renters who want to downsize in Mobile might not sacrifice as much as renters from other cities. Meanwhile, by doing so, they could save a yearly amount of $2,916. The typical down payment value for a starter home in Mobile is $8,127, making it possible to own a first home here in two years and nine months.

11. Columbus, GA

  • Time to save for a down payment: 2 years, 9 months
  • Median starter home price: $79,124
  • Down payment value: $7,912
  • Savings per year after downsizing: $2,784

12. Lansing, MI

  • Time to save for a down payment: 3 years
  • Median starter home price: $88,855
  • Down payment value: $8,886
  • Savings per year after downsizing: $2,904

13. Cleveland, OH

  • Time to save for a down payment: 3 years, 4 months
  • Median starter home price: $60,700
  • Down payment value: $6,070
  • Savings per year after downsizing: $1,812

14. Pembroke Pines, FL

  • Time to save for a down payment: 3 years, 4 months
  • Median starter home price: $235,633
  • Down payment value: $23,563
  • Savings per year after downsizing: $6,960

15. Statesboro, GA

  • Time to save for a down payment: 3 years, 5 months
  • Median starter home price: $114,733
  • Down payment value: $11,473
  • Savings per year after downsizing: $3,336

16. Lubbock, TX

  • Time to save for a down payment: 3 years, 5 months
  • Median starter home price: $127,513
  • Down payment value: $12,751
  • Savings per year after downsizing: $3,696

17. Auburn, AL

  • Time to save for a down payment: 3 years, 5 months
  • Median starter home price: $210,230
  • Down payment value: $21,023
  • Savings per year after downsizing: $6,072

18. Boca Raton, FL

  • Time to save for a down payment: 3 years, 6 months
  • Median starter home price: $294,132
  • Down payment value: $29,413
  • Savings per year after downsizing: $8,400

19. Columbia, MO

  • Time to save for a down payment: 3 years, 6 months
  • Median starter home price: $180,461
  • Down payment value: $18,046
  • Savings per year after downsizing: $5,040

20. Tulsa, OK

  • Time to save for a down payment: 3 years, 7 months
  • Median starter home price: $96,092
  • Down payment value: $9,609
  • Savings per year after downsizing: $2,676

Top Cities by State: Here's Where You Can Save the Fastest in Your State

Methodology

  • RentCafe.com is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.
  • For this report, we ranked cities based on the shortest amount of time needed to save for a 10% down payment on a starter home, using savings in rent from downsizing an apartment.
  • The savings are strictly due to downsizing a rental apartment by one bedroom and were calculated from Yardi Matrix data as a weighted average based on rents by bedroom types: Savings in rent by downsizing from one-bedroom to studio apartments, from two-bedroom to one-bedroom apartments, and from three-bedroom to two-bedroom apartments. The amounts presented are for informational purposes only. Actual savings from downsizing depend on the exact location, building quality, and apartment size.
  • We initially analyzed a total of 728 U.S. cities. Of those, the final report included 198 cities where the 10% down payment amount could be saved in less than 10 years.
  • Starter Home Prices were according to ZHVI Zillow Home Value Index.

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the research, graphics, and images presented in this article. When doing so, we ask that you credit our research by linking to RentCafe.com or this page, so that your readers can learn more about this project, the research behind it and its methodology. For more in-depth, customized data, please contact us at media@rentcafe.com.

Laura Pop-Badiu
Laura Pop-Badiu
Laura Pop-Badiu is a creative writer at RentCafe, with a background in content marketing in reputation management and the hospitality industry. Having graduated with a degree in Journalism, Laura has a genuine passion for the written word and is an avid reader of horror, thriller and literary fiction. She enjoys researching and writing about lifestyle trends and the real estate market. You can connect with Laura via email.

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