8 Cities That Make It Easy to Save for a Down Payment

When you’re choosing where to buy a home, putting down roots in an affordable city can make your dollar stretch further. But which city’s are the most affordable? 24/7 Wall Street compared the cost of living in a number of major American cities. We cross-referenced that information with median home value and median income data from the U.S. Census Bureau to uncover eight of America’s most affordable cities. 

Saving for a down payment doesn’t have to be as daunting as it once was. Many first-time homeowners have a down payment of around 5% of the home value (but it depends on what kind of loan they qualify for). You’ll want to remember to save an additional 4.5% of the home value to cover closing costs. We calculated what you’d need to save for a down payment over three years—less financially daunting than saving in one year and quicker than saving over five. 

With lower costs of living, saving for a home in these cities can be a breeze. But would you really want to live there? Yup. Get ready to fall in love.

8. Oklahoma City, Oklahoma

An aerial view of downtown Oklahoma City
An aerial view of downtown Oklahoma City.
Median home value: $148,500
Median household income: $51,581

In 2017, a CNBC survey named Oklahoma City as the best place in the country for people looking to start a business. This capital city has a strong economy, and it’s been going through a cultural renaissance in recent years, making it even more appealing to millennials.

Culture lovers gravitate towards the city’s Bricktown neighborhood, which has seen the recent construction of the Crickshaw Bricktown Ballpark and the Bricktown Canal. The neighborhood is a bustling hub of new restaurants, punctuated by a handful of sleek, new skyscrapers.

To save for a 5% down payment within three years in Oklahoma City, you’ll need to put aside $391.88 each month. That would mean saving 9.12% of the median household income in Oklahoma City. 

7. Louisville, Kentucky

The Louisville Slugger Museum and Factory.
The public entrance to the Louisville Slugger Museum and Factory. Photo by Thomas Kelley / Shutterstock.com 
Median home value: $146,900
Median household income: $49,439 

What makes Louisville different from other cities? How about a massive underground cave? According to the National Park Service, Mammoth Cave is the world’s longest known cave system. Spread over 400 miles, 10 miles of passages are available for tours.

Whiskey lovers can take on the Bourbon Trail, where sipping spirits can double as a cultural education. Art lovers flock to Louisville’s First Fridays to take in a little culture, and once a year, the city hosts the Kentucky Derby—so you finally have an excuse to wear the hat stashed in the back of your closet.

In Louisville, your three-year savings plan for a 5% down payment will require you to save $387.65 each month. That’s 9.41% of the median Louisville income. 

6. Tucson, Arizona

A colorful building near La Placita Park.
A colorful building near La Placita Park. Photo by Jay Yuan / Shutterstock.com
Median home value: $137,600
Median household income: $39,617

Say goodbye to the winter blues and embrace the perennial warmth of Tuscon. But will you have to give up scenic views? Heck no. In Tuscon, there are mountains in every direction. The Santa Catalina Mountains, Tortolita Mountains, Santa Rita Mountains, the Rincon Mountains, and the Tuscon Mountains all border the city.

Tuscon consistently ranks as one of the top cities for biking, and it’s just as beloved by runners and hikers. You also won’t have to give up your foodie habits if you move to Tuscon. Their restaurant scene has been taking off, giving residents a variety of options when it comes to tasty, savory delights.

In Tuscon, you’ll need $363.11 in savings each month to reach that goal of a 5% down payment in three years. Based on the median household income, that’s 11% of your monthly earnings.

5. Columbus, Ohio

Bicentennial park in downtown Columbus.
Bicentennial park in downtown Columbus, Ohio.
Median home value: $136,500
Median household income: $49,478 

Columbus is home to one of the country’s best zoos, with over 10,000 animals and an aquarium. The city is great for jobs, too. Major companies like Victoria’s Secret, Nationwide Insurance, and DSW all have headquarters here.

In the summer months, Columbus offers a variety of outdoor activities, festivals, and other opportunities to hang with your (very friendly) neighbors. Travel writer Rick Steves has even called Columbus an “unexpected foodie mecca.”

In Columbus, you’ll only need to put aside 8.74% of the median household income. You’ll need to save $360.21 each month for a 5% down payment over a three year period.

4. Tulsa, Oklahoma

People sitting near the pond at the Philbrook Museum of Art in Tulsa, Oklahoma. Photo by val lawless / Shutterstock.com
Median home value: $129,000
Median household income: $44,577

Tulsa is filled with art deco architectural gems, thanks to the oil boom of the 1920s. Art deco lovers will swoon over the Mayo Hotel and the Tulsa Art Deco Museum

Pretty much everywhere you look in Tulsa, you can experience living history. You can take in a concert at the famed Cain’s Ballroom, which has hosted famous acts since the 1920s (Fun Fact: Sid Vicious punched through a wall here during a set in the 1970s), or you can pursue a career in aerospace. The American Airlines maintenance factory was moved here in 1946 as recognition for Tulsa’s major airline contributions during World War II.

In Tusla, you can save for a 5% down payment in three years by squirreling away $340.42 per month. That’s 9.16% of the monthly earnings for the median household income.

3. Indianapolis, Indiana

The canal walk in downtown Indianapolis.
The canal walk in downtown Indianapolis.
Median home value: $123,500
Median household income: $44,709

If you want to enjoy all four seasons, Indianapolis can offer you that. The city’s Midwest location means that you are geographically poised to experience winter, spring, summer, and fall just as you imagine them.

The city is great for car lovers—thank you, Indie 500. St. Elmo’s steak house is an Indianapolis institution, and it’s home to the annual St. Elmo Shrimp Cocktail Eating Championship. In 2018, Glassdoor named Indianapolis as the number three city in the country for jobs, so residents looking to make a switch or individuals looking to relocate may want to put down roots in this city. 

You only need to save $325.90 each month to have enough for your 5% down payment within three years in Indianapolis. That’s just 8.75% of the monthly earnings for the median household income.

2. El Paso, Texas

An aerial view of downtown El Paso
An aerial view of downtown El Paso and the Franklin Mountains
Median home value: $121,300
Median household income: $44,431

Listen, we love a real estate deal, but what if your new home came with 297 days of sunshine each year? That’s the deal buyers in El Paso enjoy. The Hueco Tanks State Park and the Franklin Mountains provide residents with easily accessible places to get out and enjoy said sunshine. 

Want to get in touch with some history? Check out the Ysleta Mission, which dates back to 1682, and learn about its cultural importance to the Tigua people who helped build it. For families, El Paso has the added benefit of a great school system.

In El Paso, you can set aside $320.10 each month and have your 5% down payment within three years, a breeze at just 8.65% of the monthly earnings based on the median income.

1. Memphis, Tennessee

Blues clubs lining Beale Street in downtown Memphis.
Blues clubs lining Beale Street in downtown Memphis. Photo by Sean Pavone / Shutterstock.com
Median home value: $94,200
Median household income: $38,230 

Memphis has a thriving job market. FedEx, which is headquartered in the city, employs 30,000 residents. Nike has a distribution center in the city, adding another great company to the list of employers. And if you’re looking for rewarding work, is there any place better than St. Jude’s

Of course, you’ve probably heard Graceland mentioned in conversations about Memphis, but the city has even more to offer (as if The King weren’t enough). The University of Memphis’ Museum of Art offers free admission, and the Memphis Zoo is free on Tuesdays, making one of the country’s most affordable cities even better.

In Memphis, you only need to set aside 7.8% of monthly earnings (based on the median income)—or $248.58 each month—to save enough for that 5% down payment in three years.

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