Homeowners Spend More Than 6 Years Saving for a Down Payment—but Is That Too Little Too Late?

It’s no secret that the American dream of homeownership continues to be challenging for many. Rising home prices, inflation, and high mortgage rates are just some of the roadblocks buyers are facing today.

In fact, the new Raisin 2025 State of Homebuying Report found that a whopping 96% of Americans who plan to buy a home say they face “significant challenges.”

While affordability is the primary concern, with 53% saying home prices are too high, 41% say they can’t save enough for a down payment. Because of this, buyers are forced to wait years on end in order to save enough money to pursue their dream of homeownership.

But managing expectations while saving can be tricky, especially given that even after all that time saving, housing market conditions may still push the line out of reach. And yet, experts agree there's a proven strategy to get people into homes.

Mortgage rate volatility is the new reality for home buyers

As of October 30, the average 30-year mortgage rate stood at 6.17%, according to Freddie Mac.

After the announcement, Realtor.com chief economist Danielle Hale said that while they hit their lowest level in more than a year, further declines hinge on new developments, such as further rate cuts.

While these rates are decreasing, it is essential to put them in perspective. In the corresponding week in 2020, they were at 2.81%. Meanwhile, in the corresponding weeks in 2021, they were at 3.14% and jumped to 7.02% in 2022. Finally, in the corresponding weeks in 2023, they continued their ascent, standing at 7.79%, and started coming down at 6.72% in the corresponding week in 2024, according to Freddie Mac data.

The volatility of mortgage rates has a cascading effect on the housing market and homeownership. For buyers, a central issue is managing expectations while they are saving for a down payment.  How does one know how much to save if rates keep fluctuating?

Steve Sexton, CEO of Sexton Advisory Group, said the giant swing between the pandemic year and 2023, when rates have doubled, proves why timing the market is nearly impossible. As such, he said that the key for buyers saving for a down payment is to focus on what you can control.

“Rate fluctuations are out of your hands, but debt, credit score, and savings habits are not,” he said, adding that building flexibility into your plan is critical, since today's rates won't likely hold when you're ready to buy.

“It could be helpful to run some 'what-if' scenarios. Like, what if rates rise or fall by another 1-2%? Understanding how these fluctuations can impact your buying power can prepare you for the road ahead,” he said.

But is saving for 6 years too long to buy a house?

The Raisin report found that homeowners save for an average of six years to afford a down payment. Meanwhile, likely buyers say they’ve already been saving for four years and eight months.

But is this “too long” to be on the sidelines?

Cetin Duransoy, Raisin CEO, said that while six years may sound like a long time to save for a home, it’s the financial reality for many Americans today.

“With higher prices and interest rates, reaching a meaningful down payment takes time. That’s not failure; it’s discipline. There’s no perfect timeline. What matters is steady progress and smart strategy,” he said.

Duransoy added that Raisin’s research shows that 96% of aspiring homeowners are already making sacrifices to get there, such as cutting costs, delaying plans, and finding ways to earn more on their savings.

“The savers who succeed use that time to build financial strength, not just a down payment,” he added.

Other experts, however, note that exceeding a six-year timeframe for saving could be a concern, as it could delay other life milestones.

“In other words, it creates an opportunity cost to becoming a home owner, not unlike the opportunity cost of going to graduate school and taking a few years away from earning more income,” said Bobbi Rebell, CFP and consumer finance expert at BadCredit.org, adding that money being aggressively saved toward the downpayment and other future home ownership costs is money that is not being used for different things, including investing for retirement.

“That doesn’t mean it isn’t a good idea, or that it isn’t worth it. It’s just that there is a cost to be acknowledged,” she said.

What additional steps can buyers who are saving for a down payment take?

According to Raisin’s Duransoy, a critical piece of advice is to structure that goal, making saving for a home as automatic and intentional as paying a bill.

For instance, he said, set up recurring transfers into a dedicated account so saving becomes a habit, not a decision you have to make every month.

In addition, he recommends being strategic about where you keep your savings.

“Your down-payment fund should stay safe, accessible, and still earn a strong return. High-yield savings accounts or short-term CDs can help your money grow while keeping you ready to move when the right opportunity comes,” he said.

Finally, he urges buyers to use this time to strengthen their overall finances: paying down debt, improving credit, and building a small emergency fund.

“These steps make the buying process smoother and help you feel confident once you’re in your home,” he said. “Financial readiness starts long before you get the keys. The habits you build while saving are what turn homeownership into lasting stability.”

Another piece of advice is not to overfund your down payment. Put down just enough to avoid unnecessary fees or mortgage insurance, but not so much that all your liquidity gets tied up in one property, said Sergio Altomare, co-founder and CEO of real estate private equity and development company Hearthfire Holdings.

Altomare said the extra capital can be invested elsewhere for appreciation or passive income, essentially helping hedge one's mortgage through returns from alternative assets.

Most importantly, don’t try to keep up with the Joneses, he said.

“The fastest path to saving for a home is to live below your means, not around someone else’s expectations,” he said. “And pay close attention to the cost of insurance and property taxes, as those often change the math significantly. In short: build a savings plan that’s flexible, buy for the life you want, not just the one you have, and think of your home as one piece of a broader wealth strategy—not the whole story."