A simple way to save on your down payment

Renters usually downsize to save a down payment. That way, by reducing their apartment to a one-bedroom, they can return home in a few years.

Monroe, LA – Saving a down payment on their first home, the “American Dream,” may be the biggest challenge for young renters.

Beginning in the late 1960s and early 1970s, the artist lived in a two-bedroom apartment with his wife and two young children for five years. We assigned the children a bedroom and slept in the dining room. To keep winter rents down, we cleared the corner of the 16th floor of Roscoe Village of snow and took care of the coal boiler bunker. In the summer, they mowed the lawn and painted the empty rooms for the landlord. We usually had spaghetti, chili, a burger and port roast in the kitchen of the small apartment. Maybe once a week we ordered a $5 pizza.

It took five years to save $10,000 on a newspaper reporter’s weekly salary of $160. In 1973 we bought a three-bedroom, one-bathroom bungalow with an unfinished attic in the Irving Park villa district for about $29,000. The monthly payment on the First Federal Savings & Loan mortgage of $19,000 at 7.6% interest was $175.

How times have changed. Today, most young people drink $5.75 espresso lattes, go to restaurants regularly, buy luxury cars and rack up credit card debt. According to a survey of 3,700 respondents conducted by Rental Cafe, a national apartment search site, only one in three current renters are willing to switch to a smaller rental property to save money for their first home.

By giving up a one-bedroom unit, renters nationwide can save an average of $3,735 a year. With that in mind, Rental Café analyzed 200 cities to find out where renters can save the fastest down payment.

Surprisingly, Chicago ranks fourth on Rental Café’s top 50 list, despite having some of the smallest apartments in the country. Here’s the main content of the RentCafe survey:

For renters who can sacrifice space, renting a one-bedroom in Chicago can save them a whopping $8,916 a year in down payment on their home. That’s the third-highest annual savings on the list of Top 50 rental cafes.
Theoretically, if you put that much money aside, it would only take two years and three months to save $20,185 on a 10% down payment on a typical $201,848 starter home in Windy City.
According to RentCafe, Chicago apartments are among the smallest in the United States, so compromising on space can be a challenge for many. However, for smaller renters who prefer to live in a one-bedroom apartment instead of a more expensive two-bedroom apartment, it’s worth trying to save a down payment.
Suburban Chicago residents living in Dat Plains can save about $3,000 a year by moving into smaller apartments. Tenant Karp noted that the initial price of a home in Des Plaines was $232,773, so it would take more than seven years to become a homeowner.
In the far northwest suburb of Schaumburg, renters will save only $2,604 a year by downsizing, so it will take more than eight years to build their first home.
In affluent New York City, where rents average $530,117, it would take two years and seven months to save $53,112 on a 10% down payment.