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  • Writer's pictureRoy Urrico

Reports Suggest Saving for a House, and Property Investment Interest, Vary Widely by States


By Roy Urrico


Finopotamus aims to highlight white papers, surveys and reports that provide a glimpse into what is taking place and/or impacting credit unions and other organizations in the financial services industry.


Here are a couple of reports that could help credit unions understand potential borrowers’ current state of mind, literally.


The States in Which It Takes the Longest to Save For a House


A new study by Austin, Texas based SelfStorage.com discovered that Massachusetts is the state where it takes the longest to save for a house. The analysis sourced the median household income of renters and fair market rent costs from the National Low Income Housing Coalition (NLIHC) for each state, and using the 50/30/20 rule (50% on needs, 30% on wants, and 20% on savings), calculated the time it takes to save for a 10% down payment on a home.


Massachusetts took first place as the state with the longest time frame needed to save for a house. In the Bay State it would take almost 10 years to save for a 10% down payment using the 50/30/20 rule. There the median monthly household income is $5,093, while the median home listing price is $676,000. Using the aforementioned formula, Massachusettsans would have, after paying rent, $1,464 for needs, $878 for wants and $586 for savings, which would take ten years to reach the $67,600 needed for a deposit based on the median home listing.


Ranking second is Montana, where it would take 9.56 years to save $61,377. The sum corresponds to the 10% deposit of a house's median home listing price of $613,725. This can be reached by saving $535 monthly, an average of 20% of Montanans income after rent.


Hawaii comes in third by a whisker, as it would take 9.40 years to save for a 10% deposit to buy a house at a median price of $84,875. Filling out the top 5 are New York in fourth place with 8.66 years’ worth of savings needed for a house deposit, and Idaho at 8.50 years. The monthly savings to reach these goals are $574 and $554, respectively.


On the other side of the list, the states in which it takes the least time to save for a down payment are Ohio, with 3.79 years, North Dakota and Kansas with 4.02 years and Illinois with 4.25 years.


Al Harris, content manager of SelfStorage.com commented on the findings: “The time it takes to save for a house deposit in each U.S. state varies significantly, reflecting the diverse economic landscapes across the country. In states with higher living costs like Massachusetts, Montana, Hawaii or New York, the duration to save for a deposit can stretch to almost a decade, making homeownership a daunting prospect for many.”


The States Most Interested in Investing in Property


Which state is most interested in investing in property? Which state is least interested in investing in property? New York is most interested in investing in property, according to a new study from Austin, Texas-based debt-service coverage ratio lender (DSCR) Visio Lending.


The report analyzed Google data for 11 common search terms related to property and real estate to reveal the average monthly search volume in each state. The states were then ranked from “most interested” to “least interested” based on searches per 100,000 of their population.


Jeff Ball, CEO of Visio Lending, said, “The study found that the national monthly search volume for terms related to property and real estate averaged more than 268,000 over the past year, which suggests that thousands of people are interested in investing in property. The results allow us to visualize where large proportions of those searches are coming from, which is both fascinating as well as important for anyone connected to the industry.”


Some of the key findings:


· With an average of 123 searches per 100,000 people each month, New York is the state most interested in investing in property averaging 24,313 monthly searches over the past year, with 7,475 of those probing the term “real estate investment trusts.”

· Massachusetts ranked second for the states most interested in investment properties. Although the state averaged just over 7,500 average monthly searches over the past year, there were 108 searches per 100,000 population. Like New York,” real estate investment trusts” was the phrase most searched for (2,442). New Jersey ranked third and was the only other state to average 100 or more searches per 100,000 people; 1,250 of the 9,258 average monthly searches in New Jersey were for “real estate investment.”

· Among the other top 10 ranked search states came California (fourth), which had the highest average monthly search volume of any of the states in the top 10 but fell just short of 100 (99) searches per 100,000 people. Next came Maryland (fifth) with a 98 average of monthly searches per 100,000 people; Georgia (sixth) at 97 monthly average searches; and Hawaii, Virginia and Colorado, all with an average of 94 searches per 100,000 people. Washington rounded off the 10 states most interested in investing in property.


On the opposite end of the scale, West Virginia is the state least interested in investing in property with an average of 31 searches per 100,000 people. It is also the only state to average fewer than 40 searches per 100,000 people. Mississippi (42), South Dakota (44), Kentucky (44) and Iowa (45) all averaged 45 or less searches per 100,000 people.

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