In Some Markets, Saving and Breaking Even on a Home Purchase Can Take a Buyer Into Their Retirement Years
- Nationally, a typical household needs 8.5 years to save for a down payment and an additional 6.2 to break even on the purchase relative to renting, according to a new analysis by Zillow.
- In San Jose, the combined timeline is almost 50 years. In Memphis, it’s about 11 years.
- Targeting a starter home can cut the timeline roughly in half: nationwide, a typical household reaches the breakeven point in 7.2 years.
The common wisdom is that saving early to buy a home is the smart financial move, but the reality is more nuanced. Buyers should think about not just when they can afford to buy, but how long they’d need to stay before owning makes more financial sense than renting.
Nationwide, a household saving 10% of the median income can save for a down payment and come out ahead compared to renting in less than 15 years. That includes 8.5 years to save enough to put 20% down on the typical single-family home, then another 6.2 years before owning comes out ahead financially compared to renting a single-family home. That puts a four-year college graduate on track to cross that threshold by their late 30s.
In the most expensive markets — like the biggest California metros — that timeline can stretch into retirement years.
Where coming out ahead happens the fastest and the slowest for home buyers
In major metro areas, the timeline ranges from about 11 years in Memphis, to nearly 50 years in San Jose.
Among the major metros where buyers reach the break-even point soonest, most are in the Midwest and South. In Memphis and Pittsburgh, the timeline to save and break even on a single-family home is roughly 11 years. It also takes fewer than 12 years in Detroit, Indianapolis, Birmingham and Louisville. These are markets where home prices remain relatively modest.
The markets with the longest timelines are concentrated on the coasts, and in California in particular. In San Jose, the combined timeline reaches nearly 50 years. San Francisco is close behind at 47 years, followed by San Diego at 41 years and Los Angeles at nearly 38 years. In each of these markets, years of underbuilding have pushed home prices beyond what median local incomes can readily support, extending both the savings phase and the time required to make owning the better financial choice.
Potential buyers should also consider the lifestyle advantages that come with either owning or renting. Homeownership comes with equity and stability, while renting offers perks like flexibility and freedom from frightening maintenance bills.
The years add up differently depending on where you live
Not every timeline follows the same path. For example, a typical household in Austin can save for a down payment after about eight years — faster than the typical household nationwide. But, because rents have come down in the area and are relatively affordable, it would take that Austin buyer another 18 years to break even compared to renting, almost triple the length of time it would take nationwide. Meanwhile, it would take five years longer for a typical Miami household to save for that down payment, but roughly half the time to break even. Put them together, and a Miami buyer comes out ahead three years faster than in Austin despite the longer wait to buy a home.
This split matters for how potential buyers should interpret the data. A long timeline in one market may reflect affordability challenges across the board, while in a market like Austin it represents a more significant financial tradeoff when jumping into homeownership while the rental market is friendly.
In other words, for buyers who want to own a home in Austin, this data says to make sure the home is one you can stay in for the long term. The entry point may be relatively accessible, but it will likely be quite some time before buying pays off compared to the option of renting.
The starter home dilemma
One way to shorten the clock is to target a starter home, defined by Zillow as the average home in the lowest third of home values in a given region. Nationwide, it takes half the time — 7.2 years — to save for and come out ahead when buying a starter home compared to renting a typical multifamily unit.
However, with the cost of homeownership this high, buyers have signaled they do not want an expensive project. Turnkey homes sell for 2.9% more than expected, according to Zillow research, while remodeled homes sell for 2.2% more than similar homes without renovations noted in the listing description. Meanwhile, fixer-upper homes sell for 14% less. Not all starter homes need renovations, but buyers who go this route should account for the full cost of ownership, including the possibility of repairs.
The housing shortage is what’s driving the affordability crisis
In July 2019, before the pandemic, the save and breakeven timeline was 11 years nationwide, nearly four years faster than it is today. At the root of the affordability crisis is a housing shortage that stands at 4.7 million homes, according to Zillow’s latest estimate. The metros with the largest shortages tend to also have the longest breakeven timelines. Los Angeles, for example, has the second-largest deficit at nearly 345,000 homes, and a breakeven timeline of nearly 38 years.
Methodology
Years to save is calculated as the number of years a household saving 10% of the area’s median income would need to accumulate a 20% down payment on either a typical single-family home or a typical starter home. The years to break even compared to renting is drawn from Zillow’s Rent vs. Buy analysis, which compares the total costs of owning versus renting an equivalent home, accounting for mortgage payments, taxes, insurance, maintenance and opportunity costs.
The primary scenario compares buying a typical single-family home, as measured by the Zillow Home Value Index, against renting a typical single-family unit, as measured by the Zillow Observed Rent Index. The starter home scenario compares buying a starter home — defined as the average home in the lowest third of home values in a given region — against renting a typical multifamily unit, as measured by the Zillow Observed Rent Index. Data reflects market conditions as of May 2026.
| Metro Area | Years to Save (Single-Family Home) | Years to Break Even (Single-Family Home) | Total (Single-Family Home) | Years to Save (Starter Home) | Years to Break Even (Starter Home) | Total (Starter Home) |
| United States | 8.5 | 6.2 | 14.7 | 4.6 | 2.6 | 7.2 |
| New York, NY | 14.3 | 15.1 | 29.4 | 9.2 | 3.9 | 13.1 |
| Los Angeles, CA | 19.8 | 17.9 | 37.7 | 12.9 | 13.5 | 26.4 |
| Chicago, IL | 7.9 | 6.9 | 14.8 | 4.8 | 2.7 | 7.4 |
| Dallas, TX | 7.4 | 9.5 | 16.9 | 5.0 | 5.9 | 10.9 |
| Houston, TX | 7.1 | 6.1 | 13.2 | 4.8 | 4.3 | 9.1 |
| Washington, DC | 9.3 | 11.4 | 20.7 | 5.6 | 6.6 | 12.2 |
| Philadelphia, PA | 8.3 | 9.8 | 18.0 | 4.7 | 3.3 | 7.9 |
| Miami, FL | 13.2 | 9.6 | 22.8 | 5.9 | 2.6 | 8.5 |
| Atlanta, GA | 7.8 | 5.3 | 13.2 | 5.2 | 3.1 | 8.2 |
| Boston, MA | 12.3 | 15.1 | 27.4 | 8.2 | 7.4 | 15.6 |
| Phoenix, AZ | 9.5 | 6.1 | 15.6 | 6.8 | 4.6 | 11.4 |
| San Francisco, CA | 16.9 | 30.0 | 46.9 | 9.2 | 17.0 | 26.2 |
| Riverside, CA | 12.3 | 10.8 | 23.0 | 8.7 | 7.3 | 15.9 |
| Detroit, MI | 6.6 | 4.8 | 11.4 | 3.4 | 1.6 | 4.9 |
| Seattle, WA | 13.0 | 18.4 | 31.4 | 8.6 | 13.2 | 21.8 |
| Minneapolis, MN | 7.8 | 8.2 | 16.0 | 5.4 | 6.3 | 11.7 |
| San Diego, CA | 17.0 | 23.4 | 40.4 | 11.3 | 13.3 | 24.5 |
| Tampa, FL | 9.0 | 6.3 | 15.2 | 5.6 | 3.0 | 8.6 |
| Denver, CO | 10.3 | 10.3 | 20.6 | 6.9 | 11.5 | 18.4 |
| Baltimore, MD | 7.9 | 9.5 | 17.4 | 4.4 | 3.6 | 8.0 |
| St. Louis, MO | 6.5 | 9.2 | 15.7 | 3.3 | 2.7 | 5.9 |
| Orlando, FL | 9.3 | 5.8 | 15.1 | 6.1 | 3.3 | 9.4 |
| Charlotte, NC | 8.5 | 5.9 | 14.4 | 5.5 | 3.5 | 9.0 |
| San Antonio, TX | 6.7 | 7.8 | 14.4 | 4.3 | 5.6 | 9.9 |
| Portland, OR | 10.6 | 16.3 | 26.8 | 7.8 | 18.2 | 25.9 |
| Sacramento, CA | 11.2 | 14.4 | 25.6 | 8.2 | 12.8 | 21.0 |
| Pittsburgh, PA | 5.5 | 5.6 | 11.1 | 2.9 | 2.1 | 5.0 |
| Cincinnati, OH | 7.4 | 4.8 | 12.2 | 4.5 | 3.1 | 7.6 |
| Austin, TX | 8.1 | 18.1 | 26.2 | 5.7 | 23.3 | 28.9 |
| Las Vegas, NV | 10.5 | 5.3 | 15.7 | 7.3 | 3.7 | 11.0 |
| Kansas City, MO | 7.4 | 8.6 | 16.0 | 4.4 | 3.4 | 7.8 |
| Columbus, OH | 8.0 | 5.5 | 13.5 | 4.5 | 3.2 | 7.7 |
| Indianapolis, IN | 7.1 | 4.4 | 11.5 | 4.4 | 2.4 | 6.8 |
| Cleveland, OH | 7.0 | 6.1 | 13.1 | 3.9 | 2.4 | 6.3 |
| San Jose, CA | 19.2 | 30.0 | 49.2 | 10.8 | 24.5 | 35.3 |
| Nashville, TN | 9.8 | 8.4 | 18.2 | 6.6 | 5.3 | 12.0 |
| Virginia Beach, VA | 8.6 | 9.3 | 18.0 | 5.8 | 5.8 | 11.7 |
| Providence, RI | 12.5 | 10.0 | 22.5 | 9.2 | 8.2 | 17.3 |
| Jacksonville, FL | 8.3 | 7.3 | 15.5 | 5.0 | 3.3 | 8.3 |
| Milwaukee, WI | 9.8 | 11.9 | 21.8 | 5.9 | 4.4 | 10.3 |
| Oklahoma City, OK | 6.3 | 9.2 | 15.5 | 3.9 | 4.3 | 8.1 |
| Raleigh, NC | 8.1 | 10.3 | 18.4 | 5.6 | 6.3 | 11.8 |
| Memphis, TN | 6.8 | 4.2 | 10.9 | 3.4 | 1.8 | 5.2 |
| Richmond, VA | 9.1 | 6.7 | 15.8 | 6.3 | 4.6 | 10.9 |
| Louisville, KY | 7.2 | 4.7 | 11.9 | 4.7 | 2.7 | 7.4 |
| New Orleans, LA | 8.0 | 11.2 | 19.2 | 5.1 | 3.3 | 8.4 |
| Salt Lake City, UT | 10.9 | 6.9 | 17.8 | 8.0 | 6.9 | 14.9 |
| Hartford, CT | 8.5 | 14.3 | 22.8 | 5.8 | 10.3 | 16.0 |
| Buffalo, NY | 7.6 | 4.7 | 12.3 | 5.1 | 3.2 | 8.3 |
| Birmingham, AL | 6.6 | 5.2 | 11.7 | 3.0 | 1.8 | 4.9 |
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