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Welcome to the Midwest: 2022’s Best Metros Where Renters Can Save Fastest for Their First Home

Saving for a down payment on a starter home and becoming a first-time homeowner in less than three years is possible — especially in the Midwest. Bloomington, IL, and Springfield, IL, are among the four metros where you may reach this goal by the end of 2023.

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 your 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, we were determined to find out where renters could purchase their first home in the shortest amount of time. So, to come up with the best metros to buy your first home, we 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.

The Midwest: Where Saving is Easiest

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. Moreover, in all of the top 20 metros, it would take three years or less to achieve the dream of homeownership.

Notably, small- to mid-sized metros in the Midwest are the best for first-time homebuyers,  and Illinois is the top individual state, with seven metros where incomes and the cost of living allow you to set aside money for a down payment. Namely, the fastest metros to save in are Bloomington and Springfield — both in Illinois — followed by Cedar Rapids, IA, and Trenton-Princeton, NJ. In these areas, the average family could buy their first home in less than two years.

1. Bloomington, IL

  • Time to save for a down payment: 1 year
  • Median starter home price: $105,249
  • Down payment value: $21,050
  • Median income (two-person family): $91,049
  • Needs 63% / Wants 15% / Savings 22%

The one place where you can safely make a New Year’s resolution to become a homeowner in precisely one year is Bloomington, in downstate Illinois. This green, vibrant college community is home to Illinois State University and has a high percentage of work-from-home jobs, as well as above-average salaries, low housing costs and starter homes for just more than $100,000. In fact, Bloomington’s remarkable quality of life earned it the recognition as the best place to live in, after the pandemic ends.

 

2. Springfield, IL

  • Time to save for a down payment: 1 year, 3 months
  • Median starter home price: $81,901
  • Down payment value: $16,380
  • Median income (two-person family): $81,855
  • Needs 68% / Wants 17% / Savings 15%

Second on our list, the Illinois state capital has a strong education and healthcare economy. Here, it would take just one year and three months to save for a down payment, thanks to affordable starter homes, high quality of life and a suburban feel. Springfield also has a high share of remote jobs, which is another great reason to call this southern Illinois town home.

 

3. Cedar Rapids, IA

  • Time to save for a down payment: 1 year, 9 months
  • Median starter home price: $117,181
  • Down payment value: $23,436
  • Median income (two-person family): $79,532
  • Needs 63% / Wants 20% / Savings 17%

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.

 

4. Trenton, NJ

  • Time to save for a down payment: 1 year, 10 months
  • Median starter home price: $164,490
  • Down payment value: $32,898
  • Median income (two-person family): $96,196
  • Needs 65% / Wants 17% / Savings 18%

Famous for its world-renowned research university, Princeton University, this metro ranks fourth in terms of how fast you can save for a down payment. And, although the housing market here tends to be one of the most expensive in New Jersey, the median two-person family income in the Trenton area surpasses $96,000 and expenses are below-average. A magnet for young professionals, the community is quickly adapting to a high influx of residents and businesses, all while preserving its architecture and open space.

 

5. Ann Arbor, MI

  • Time to save for a down payment: 2 years, 4 months
  • Median starter home price: $228,996
  • Down payment value: $45,799
  • Median income (two-person family): $92,298
  • Needs 64% / Wants 15% / Savings 21%

What's amazing is that Ann Arbor — a bustling university town — offers young professionals graduating from the University of Michigan the chance to pursue their homeownership dream right here. While starter homes in this community just outside of Detroit are pricier than they are in other metros, the lower cost of living and high wages allows families to save up to 21% of their income.

 

6. Bismarck, ND

  • Time to save for a down payment: 2 years, 4 months
  • Median starter home price: $212,918
  • Down payment value: $42,584
  • Median income (two-person family): $87,004
  • Needs 61% / Wants 18% / Savings 20%

Bismarck has the second-lowest cost of living in our top 20, which balances out the higher price of starter homes. It's also a safe and growing community with a low unemployment rate and a solid economy based on agriculture and energy production. Bismarck is the first of two North Dakota communities on our top 10 list, the other being Fargo (ranked 8th).

 

7. Bridgeport, CT

  • Time to save for a down payment: 2 years, 5 months
  • Median starter home price: $303,031
  • Down payment value: $60,606
  • Median income (two-person family): $112,228
  • Needs 62% / Wants 16% / Savings 22%

Set north of Long Island, Bridgeport is one of the most sought-after places in the U.S. Accordingly, its population of 943,000 makes it the largest metro in our top 10. And, although Bridgeport boasts some of the most expensive starter homes on our top 20 list, people here also have higher wages — which allows them to save up to 22%, the most in our top 10.

 

8. Fargo, ND

  • Time to save for a down payment: 2 years, 5 months
  • Median starter home price: $187,766
  • Down payment value: $37,553
  • Median income (two-person family): $83,854
  • Needs 63% / Wants 19% / Savings 18%

Average house prices and a low cost of living allow Fargo to rank among the top 10 metros for saving. What's more, the metro has a strong economy and boasts some of the lowest unemployment rates in the nation. It's spread across the state border between North Dakota and Minnesota and, given its career openings in growing industries, it's a spot to consider becoming a homeowner.

 

9. Madison, WI

  • Time to save for a down payment: 2 years, 6 months
  • Median starter home price: $242,538
  • Down payment value: $48,508
  • Median income (two-person family): $89,899
  • Needs 64% / Wants 15% / Savings 21%

Expensive houses — but a high savings rate of 21% — make this Wisconsin metro worth considering. In fact, Madison, is said to be one of the most “quintessentially American cities” and has a vibrant cultural life. The acclaimed University of Wisconsin - Madison is one of the top employers in the region. The metro is also steadily growing and attracting residents and professionals in the health-care, information technology and manufacturing industries.

 

10. Des Moines, IA

  • Time to save for a down payment: 2 years, 7 months
  • Median starter home price: $154,720
  • Down payment value: $30,944
  • Median income (two-person family): $80,862
  • Needs 66% / Wants 19% / Savings 14%

The fastest-growing metro in the Midwest, Des Moines ranks 10th on our list. With a 14% savings rate and relatively low costs of necessities, this area is preferred by many Millennial families. It's also one of the safest places to live in the country. Here, starter homes are among the least expensive in our top 20, which makes a job hub like Des Moines the perfect place to start saving for a down payment.

 

11. Hartford, CT

  • Time to save for a down payment: 2 years, 8 months
  • Median starter home price: $198,000
  • Down payment value: $39,600
  • Median income (two-person family): $93,124
  • Needs 65% / Wants 20% / Savings 16%

 

12. Fond du Lac, WI

  • Time to save for a down payment: 2 years, 8 months
  • Median starter home price: $122,982
  • Down payment value: $24,596
  • Median income (two-person family): $73,562
  • Needs 69% / Wants 19% / Savings 12%

 

13. Champaign, IL

  • Time to save for a down payment: 2 years, 8 months
  • Median starter home price: $102,166
  • Down payment value: $20,433
  • Median income (two-person family): $80,258
  • Needs 73% / Wants 17% / Savings 9%

 

14. Baltimore, MD

  • Time to save for a down payment: 2 years, 9 months
  • Median starter home price: $211,039
  • Down payment value: $42,208
  • Median income (two-person family): $94,477
  • Needs 65% / Wants 19% / Savings 16%

 

15. Waterloo, IA

  • Time to save for a down payment: 2 years, 10 months
  • Median starter home price: $91,403
  • Down payment value: $18,281
  • Median income (two-person family): $73,403
  • Needs 70% / Wants 21% / Savings 9%

 

16. Washington, DC

  • Time to save for a down payment: 2 years, 10 months
  • Median starter home price: $341,444
  • Down payment value: $68,289
  • Median income (two-person family): $120,208
  • Needs 60% / Wants 21% / Savings 20%

 

17. Cincinnati, OH

  • Time to save for a down payment: 2 years, 11 months
  • Median starter home price: $151,092
  • Down payment value: $30,218
  • Median income (two-person family): $75,282
  • Needs 68% / Wants 19% / Savings 14%

 

18. Akron, OH

  • Time to save for a down payment: 3 years, 1 month
  • Median starter home price: $104,637
  • Down payment value: $20,927
  • Median income (two-person family): $70,806
  • Needs 71% / Wants 20% / Savings 9%

 

19. Decatur, IL

  • Time to save for a down payment: 3 years, 2 months
  • Median starter home price: $46,696
  • Down payment value: $9,339
  • Median income (two-person family): $69,248
  • Needs 76% / Wants 20% / Savings 4%

 

20. Naples, FL

  • Time to save for a down payment: 3 years, 3 months
  • Median starter home price: $262,944
  • Down payment value: $52,589
  • Median income (two-person family): $93,477
  • Needs 68% / Wants 15% / Savings 17%

 

Methodology

RentCafe is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.

In this report, we analyzed a total of 174 U.S. metros, identified 64 metros where less than 10 years were necessary to save for a 20% down payment on a starter home, based on several data sets. We then ranked the top 20 metros based on the shortest amount of time needed to save for a 20% down payment. 

Metro area population, median income for two-person families and median gross rent are according to the Census American Community Survey (ACS) 2019.

Necessity costs (needs) were calculated based on The Economic Policy Institute’s Family Budget Calculator data. Annual totals without housing costs were replaced by Census median rent costs in each metro.

Extra costs (wants) are based on the US Bureau of Labor Statistics - Consumer Expenditure Survey, 2018-2019 and include: food away from home; alcoholic beverages; apparel and services; entertainment; education; miscellaneous; cash contributions; personal care products and services; and reading.

Starter Home Prices are 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 images in this article. When doing so, we only ask that you kindly attribute the authors 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.

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Adrian Popa
Adrian Popa is a content strategist and writer for RENTCafé, with an interest in finding stories behind data, exploring and presenting them in a way that’s meaningful and relevant. He mostly covers real estate features and reports that reflect how the industry is impacting people’s lives. His work was quoted by major media outlets, such as The New York Times, The Wall Street Journal, CBS News, Bisnow and others. Prior to entering the real estate industry, he has gained over fifteen years of experience as a journalist, editor-in-chief, and communications specialist. Adrian holds a bachelor’s degree in Journalism and a master’s degree in Communication and Media Studies. You can connect with Adrian via mail.

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