Pandemic-induced employment isn’t stopping a sizable portion of would-be homebuyers from realizing their real estate dreams. That’s the takeaway from a new Redfin report, which finds 24 percent of first-time homebuyers are using stimulus money for their down payment.
According to a Redfin-commissioned survey of 1,500 U.S. residents planning to buy or sell a home in the next 12 months, who answered “How did you accumulate the money you need for a down payment?” Some 52 percent responded with plans to use money saved from paychecks, but the second most-popular answer, relying on stimulus money, was a surprising find for analysts.
“There was a fair amount of economic uncertainty at the beginning of the pandemic and many people initially lost their jobs due to widespread lockdowns. But plenty of Americans, particularly those who are in a position to buy a home, are now in a better financial position than before,” said Redfin Chief Economist Daryl Fairweather. “Stimulus payments provided a lot of Americans not only with necessary relief, but extra money in their pockets. Some people were also able to save more money than usual because they spent less on things like traveling, eating out and paying back student loans, which were paused during the pandemic. ”
The average American family with children received $6,660 in stimulus money in 2021. That money, n theory, can make a dent in a down payment.
According to Redfin, the typical U.S. home sells for $382,900 and the median down payment is roughly 10 percent, which equals about $38,000 for the median-priced home. Some buyers put down as little as 3 percent, which would equal an $11,500 down payment.
Per the survey, 23 percent of survey respondents said the ability to save extra money during the pandemic has helped with their down payment, the third-most common method of accumulating money for a down payment.