First-time home buyers using stimulus checks for down payment

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Government stimulus checks are helping people achieve the dream of buying their first home.

A recent report from Redfin found that nearly one in four first-time home buyers use government stimulus money to help put down a down payment.

The data comes from a December survey of 1,500 US residents. Of the 215 respondents who said they planned to buy their first home in the next year, 24% said they had saved stimulus money to help build up a down payment.

The most popular down payment source was also the most traditional: 52% of respondents said they saved money directly from their salary.

Others said they were able to save extra money during the pandemic (24%), or their down payment came at least in part from a second job (22%) or an inheritance (17%). Some even said they were boosted by the cryptocurrency markets: 12% of respondents said proceeds from the sale of cryptocurrency investments contributed to their down payments.

Stimulus checks helped boost Americans’ savings

In a statement accompanying the survey, Redfin chief economist Daryl Fairweather said that despite the economic upheaval of the early days of the pandemic, “many Americans, especially those in a position to buy a home , are now in a better financial position. than before.” That’s partly because “stimulus payments have provided many Americans with not only much-needed relief, but also extra cash in their pockets,” she added.

Since the start of the coronavirus pandemic, the federal government has approved three separate rounds of stimulus payments of up to $1,200, $600 and $1,400. Additional aid funds have also been sent to parents in the form of advance payments of a significantly expanded child tax credit.

Experts widely credit this emergency money with helping to keep many American families afloat during the worst of the economic crisis. One to study from the University of Michigan found that financial instability – measured by the share of adults with children in US Census data who said it had been very difficult to pay for household expenses during the week last – fell 43% between December 2020 and April 2021.

While most Americans spent the first round of payments on essentials like food and rent, according to a To analyse by the Peter G. Peterson Foundation, households were more likely to save portions of subsequent rounds.

Of course, some pundits have argued that all that federal stimulus money has also contributed to inflation, which has soared 7% year-over-year and helped drive up the prices of everything from gas groceries – not to mention the rent and the house. prices.

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About Matthew R. Dailey

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