Best States for First-Time Homebuyers—and Where You Could Save a Down Payment in Just 2 Years (Q4, 2024 Report)

• A new study has revealed that West Virginia ranks as the best state to buy your first property, with the average time to save for a down payment estimated at just two years. 

• North Dakota and Iowa round out the top three states. 

• Hawaii and California rank the hardest states for first-time buyers—where saving for a down payment could take four to six times longer than the best states. 

New research has revealed the states where first-time homebuyers may have the best chances to enter the property market in the shortest time—with West Virginia taking the top spot. 

The study by Real Estate CRM REsimpli analyzed data from the US Census, the National Low-Income Housing Coalition (NLIHC) and the US Bureau of Economic Analysis to rank the US states according to their affordability for first-time homebuyers to purchase a property. 

The factors considered include the median home cost in each state, the average down payment (calculated at 14.4% based on the national average), and each state’s living expenses.

For this study, the latter was determined based on the cost of rent for a two-bed house in each state, using figures from the NLIHC and assuming potential homebuyers are currently renting a home of this size.

After rent, the study calculated 30% of the remaining income as savings for a down payment, allowing 70% for other living expenses and personal spending.  

This determined the average time it would take in each state to save for a down payment, ranking the states where first-time buyers may purchase a home in the shortest time. 

Best States for First-Time Homebuyers 

West Virginia is the best state for first-time homebuyers, with the study estimating that it takes only two years to save the average down payment for a home.

According to the findings, a 14.4% down payment would be around $22,334, and based on average living expenses in the state, 30% of remaining income after rental costs would be an estimated $11,000 per year, taking around 24 months to save the total down payment. 

North Dakota and Iowa follow, with the findings revealing it takes two years and one month to save for a down payment in each state.

This is based on a down payment value of $35,006 in North Dakota and around 25% lower in Iowa at $28,022. 

The study found that it takes on average, two years and three months, to save a down payment of 14.4% in Oklahoma and Kansas, based on 30% of disposable income after living expenses—where the median down payments in each state are under $30,000.

However, the study estimated that it also takes this duration, on average, in South Dakota, where the median down payment is higher at $35,280. 

The findings reveal that first-time homebuyers also have some of the best chances of purchasing a property relatively quickly in Arkansas and Nebraska.

Based on median home down payments of $25,891 and $33,466, respectively, the living expenses and average income in the state mean a down payment may be saved in two years and four months, on average. 

Rounding out the best states to save for a down payment in the shortest time are Ohio and Mississippi—with the study estimating a down payment of 14.4% takes around two years and five months to save in each state.

This equates to $29,390 in Ohio and $23,400 in Mississippi. 

Hardest States for First-Time Homebuyers 

At the other end of the spectrum, the ability to save for a down payment may be more challenging and even take upwards of a decade in states where the median home prices are far higher. 

The analysis revealed that Hawaii may be the hardest state for first-time buyers to purchase a home, with the average time to save for a 14.4% down payment in the state estimated at a staggering 13 years and four months.  

This is followed by California ranking second, with the findings identifying that a median, 14.4% down payment of $103,090 takes first-time homebuyers an average of eight years and 11 months to save, based on living expenses and income in the state. 

Utah was identified as the third-hardest state for first-time homebuyers, with the average time to save a down payment, estimated at around six years and three months.

This is based on the median home value in the state of $499,500 and a 14.4% down payment of $71,928. 

Also ranking among the most challenging states for first-time buyers, all with median home values identified above $475,000 are Oregon, Washington, Colorado, and Massachusetts.

For potential homebuyers hoping to secure their first property in these states, the average time to save for a down payment ranges from five years and six months to six years and two months, according to the study. 

It was also revealed that it takes on average five years and six months to save a down payment in Arizona.

This is based on the state’s median home value of $402,800 and a down payment of $58,003. 

Nevada and Idaho round out the toughest states for first-time homebuyers to purchase a property.

The study identified the average duration is around five years and five months in both states, based on a 14.4% down payment of just over $62,000. 

Sharad Mehta, CEO of REsimpli, commented:  

“For first-time homebuyers, knowing where may be most affordable to save for a down payment can be crucial in planning their next steps. This is especially true in today’s challenging market for this group, with the National Association of Realtors revealing that the first-time homebuyer market share hit a historic low of 24% in November 2024. 

“Housing costs and income varies across the US, meaning the time needed to save can range from only a couple of years in states like West Virginia or North Dakota, to even over six times in other states. 

“Understanding these differences can help buyers set realistic goals or even explore relocating to more affordable areas.” 

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Sources: US Census, National Low-Income Housing Coalition, bea.gov (disposable personal income), Forbes, National Association of Realtors.  

Methodology:  

• For each state, the median cost of a home was retrieved from the census and used to calculate the cost of a 14.4% deposit.  

• To find how long it would take to save for the deposit, each state’s living expenses were determined based on the cost of rent in the state for a two-bedroom home, using figures from the NLIHC.  

• These Fair Market Rents (FMRs) give the 40th percentile home prices in each state – a figure slightly below the median. For this study, we assume that potential homebuyers are currently renting a typical two-bedroom property.  

• After rent, 30% of the remaining income is treated as savings for a down payment; the other 70% is for other living expenses and personal spending. 

• After calculating the average amount saved per year across all earners (after tax), the average time it would take to save for the down payment in each state was determined. 

• Note: Median home value and median down payment are based on 2022 figures. 

All States: