Best and Worst States for Saving a Down Payment on a Home - The Money Guy Show Recap

Podcast: The Money Guy Show

Published: 2026-01-07

Duration: 1 hr 5 min

Summary

Saving for a home down payment varies significantly by state, with Consumer Affairs ranking states based on the time needed to save. The Money Guy Show offers insights and strategies to accelerate this process.

What Happened

Consumer Affairs ranked all 50 states based on the time it takes to save for a 10% down payment on a median-priced home. The fastest states include Iowa, Ohio, and Texas, where it takes about 9 to 10 years. In contrast, saving takes much longer in states like California, Montana, and New York, with timelines extending beyond 23 years.

The methodology used by Consumer Affairs includes factors like median household income, tax burden, and living expenses, assuming 10% of discretionary income is saved. However, The Money Guy Show suggests a more aggressive approach, recommending a 3% down payment and higher savings rate to reduce the time needed.

For instance, in California, a 3% down payment on a median home price of $832,000 would be approximately $25,000. In Iowa, this same percentage on a $247,000 home results in a $7,400 down payment, demonstrating significant regional differences.

The '3520' rule is highlighted, advocating for a 3% down payment, a 5-7 year minimum stay, and monthly housing costs below 25% of gross income. This strategy aims to make homeownership more accessible and financially stable.

The episode also marks the 20th anniversary of The Money Guy Show, reflecting on its evolution from a personal finance education platform to a comprehensive financial advisory service. Brian Preston and Bo Hanson share how the podcast has grown, expanding into YouTube and client acquisition.

High-income earners are advised on retirement contributions, with a focus on the potential tax implications of Roth conversions and the benefits of pre-tax contributions. The discussion includes strategies for maximizing retirement savings under current tax laws.

Listeners' financial queries are addressed, such as refinancing options and 529 plans for college savings. The episode underscores the importance of strategic financial planning and the value of audience engagement through resources and feedback.

Key Insights

• Consumer Affairs ranks Iowa, Ohio, and Texas as the fastest states to save for a 10% down payment on a median-priced home, taking about 9 to 10 years. In contrast, California, Montana, and New York require over 23 years.
• A 3% down payment strategy significantly reduces the time to save for homeownership. In California, this equates to approximately $25,000 on a median home price of $832,000, while in Iowa, it's about $7,400 on a $247,000 home.
• The '3520' rule for homebuyers recommends a 3% down payment, a minimum stay of 5-7 years, and keeping monthly housing costs below 25% of gross income to ensure financial stability.
• High-income earners are advised to consider the tax implications of Roth conversions and the benefits of pre-tax contributions to maximize retirement savings under current tax laws.