Want to Buy a Home in San Francisco? Save This Much Cash Each Day.

Saving for a down payment is a huge obstacle for many first-time homebuyers and millennials who are saddled with student-loan and credit-card debt. Here in the Bay Area, where prices are among the highest in the nation, hopeful buyers who don’t already have equity in a home — or aren’t already very affluent — might consider putting their savings plans on steroids.Feel free to use this image, just link to www.SeniorLiving.Org

A recent analysis by Realtor.com calculates how much money homebuyers need to save each day in order to swing the down payment in 15 major U.S. metro areas. The study uses the average down payment size and median list price in each city and assumes five- and 10-year savings plans. To give the study an everyday perspective, Realtor.com translates the daily savings budget into the number of grande Starbucks Caramel Macchiatos (at $4.45 a pop) a buyer would need to give up in order to meet their home-savings goal. (It’s worth noting that the study does not account for future home price appreciation.)

On end of the spectrum is Detroit, where the median list price is $200,000. Those who want to own a piece of the Motor City would typically place a 12 percent down payment, or $24,000. That works out to $13.14 per day in five years (three fancy coffee drinks each day), or $6.57 in 10 years (a single cup).

On the other side of the caffeine-fix scale is San Francisco, where a home lists for more than four times than in Detroit: $875,000. With an average down payment of 21.8 percent, that comes out to $190,750. On a five-year plan, buyers in the City by the Bay should save $104.46 each day, or $52.23 over 10 years. The good news is that not even the most hardcore java junkie could likely suck down the dozen Caramel Macchiatos that money would buy on the 10-year plan, let alone the 23 you could get on the five-year fast track.

Besides keeping their daily caffeine intakes to a responsible level, aspiring Bay Area homebuyers can do a few things to help their down-payment savings pile up faster now that they know their goal and timeline. In recognition of American Housing Month in June, the American Bankers Association Foundation offered a few tips to better save cash, including:

  • Opening a dedicated down-payment savings account
  • Comparison-shopping for lower rates on insurance and telecom services
  • Tracking discretionary spending online
  • Researching local and state first-time homebuyer programs
  • Celebrating savings milestones with self-rewards.

Saving for a down payment in the high-dollar Bay Area can be a daunting task, but with the highest rents in the U.S., it’s ultimately far better to pay yourself through homeownership than it is to pay the landlord.

(Photo: Flickr/Ken Teegardin)

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