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With unemployment at record highs, many people are being forced to dip into their savings to cover everyday expenses and stay afloat. For the average millennial, it will take nine months of saving to recoup a single month’s worth of expenses, which could delay their goals of homeownership until long after coronavirus is under control, according to a new analysis released today by®.

San Francisco and Nashville, Tenn., led the down payment delay at 10 months to recoup a single month’s worth of expenses, with Seattle and Denver close behind at 9.8 months. All are markets that are Millennial magnets which have above-average incomes but also above-average housing costs and expenses.

“Millennials may largely escape the worst of COVID-19, but with an unemployment rate of 13.4 percent, this age group is not immune from the economic fallout. As they cobble together money for expenses from unemployment benefits and side-hustles, many will find that they need to dip into savings to cover necessities from groceries to rent. This could delay their home purchase by years,” said® Chief Economist Danielle Hale. “Homeownership has already been delayed for many millennials and the coronavirus could push the timetable even further out for some.”

The report found it would take the average millennial 53 months—over four years—to recover that value back into their savings, if they had no income for six months. The analysis assumes a savings target of 10 percent of their take-home pay (the 20-year national savings rate average was 6 percent, but recently spiked to 33 percent) and that household incomes will return to their pre-COVID levels after the lockdown. It does not account for time ramping back up to full employment or potential salary reductions, which could further delay millennial homebuyer recovery.

For this analysis, the average millennial household expenses are $3,770 per month, with a median monthly household income of $4,240 after taxes. While COVID-19 has impacted people within all generations, millennials are the largest generation in U.S. history and make up the largest homebuying segment.

Adding to millennial homebuyer challenges, some lenders are tightening their lending criteria by requiring higher credit scores and minimum down payments for some types of loans. Major banks have recently changed their criteria for home lending by requiring borrowers to secure 20 percent down payments, significantly higher than the millennial median down payment of 8 percent. With a national median listing price of $320,000 in April, a 20 percent down payment would be $64,000.

According to the report, adding an additional 10 percent to a homebuyer’s downpayment would require an additional 6.5 years of saving, on average.

“Most young buyers purchase a home with much less than a 20 percent down payment and while these loans are still technically available, finding a lender willing to make one may be more challenging. Rather than saving for the extra years needed to buy into a pricey city, millennials could turn to suburbs or more affordable metro areas,” Hale noted.

Facing a higher cost of living, millennials living in urban markets are likely to take the longest time to recover lost savings.

For example, in San Francisco, if a homebuyer were to dip into their savings for six months, it would take five years to recoup those losses. Additionally, with major lenders increasing their minimum down payment requirement for some loans to 20 percent, millennials in San Francisco who were aiming for a 10 percent down payment would need to save for an additional 16 years to meet that new lending criteria. See here for broader market analysis of the toughest markets.

Top 10 Markets That Take the Longest to Recoup Savings

Rank County Monthly Median Income After Taxa Monthly Savings (10% of Income)b Monthly Expensesc Months of Saving to Recoup 1 Month of Expenses Months of Saving to Recoup 6 Months of Expenses Median Listing Priced Years of Saving Needed for Additional 10% Down Paymente
1 San Francisco, Calif. $8,179 $818 $8,179 10.0 60 $1,590,000 16.2
2 Williamson, Tenn. (Nashville) $6,180 $618 $6,180 10.0 60 $685,000 9.2
3 King, Wash. (Seattle) $5,815 $582 $5,704 9.8 59 $725,000 10.4
4 Douglas, Colo. (Denver) $6,622 $662 $6,479 9.8 59 $642,000 8.1
5 Forsyth, Ga. (Atlanta) $6,679 $668 $6,428 9.6 58 $405,000 5.1
6 Ascension Parish, La. (New Orleans) $4,788 $479 $4,565 9.5 57 $278,000 4.8
7 Shelby, Ala. (Birmingham) $4,795 $479 $4,540 9.5 57 $346,000 6.0
8 Howard, Md. (Baltimore) $6,370 $637 $6,023 9.5 57 $600,000 7.8
9 Midland, Texas $4,707 $471 $4,445 9.4 57 $367,000 6.5
10 Pulaski, Ark. (Little Rock) $3,233 $323 $3,048 9.4 57 $215,000 5.5

For more information, visit®.