Millennials and buying a home: how they made the down payment


Buying a home right now is a challenge for newbies, millennials, and most Americans. But for millennials who have been able to maintain steady employment through pandemic lockdowns and stay-at-home recommendations, the money saved, in some cases, has been spent on buying a home.

“For almost a third (31%) of millennium first-time buyers, the ability to save extra money during the coronavirus pandemic has helped them accumulate the money needed for a down payment, ”says the new report of Redfin, who surveyed more than 1,500 Americans who plan to buy or sell a home in the next 12 months. Over 100 millennium first-time buyers answered the question about down payments.

While the most frequently cited method of accumulating enough money for a down payment was “money saved directly from paychecks” (48%), this method is followed by “saving money. extra money during the coronavirus pandemic “(31%). Other popular methods included a second job (27%), family cash gifts (20%), and selling equity investments (19%).

The personal savings rate in the United States reached 33.7% in April 2020, up from 7.2% before the pandemic in December 2019. It remained at a high level, reaching 27.6% in March, according to the Federal Reserve Bank of St. Louis and the United States Bureau of Economic Analysis, which track the percentage of personal disposable income saved by Americans in a given month.

Redfin survey: one-third of millennial homebuyers use additional pandemic savings for down payment

Redfin also determined that while the pandemic has motivated some homeowners to move, it has simultaneously prompted an almost equal number of others to stay put.

Thirty-seven percent of all homebuyers surveyed (regardless of age) buy a home later than originally expected due to the pandemic and 32% buy a home earlier than originally expected.

Explains Redfin contributors:

The popularity of remote working is fueling the demand for spacious homes and is also driving people to move to entirely different areas. But rising prices and a housing shortage are among the factors leading potential buyers to put off their home search.

“About half of my clients are people who move to the Central Valley of the Bay Area because they want to live in a bigger house for less money, and a lot of them don’t need to. get into town once or twice a week, if that, “said Steven Majourau, an agent in Stockton, Tracy and other parts of the Central Valley of California. “They sell a big condo or a townhouse for almost a million dollars, or a small single-family house for Following over a million dollars – in San Francisco, San Jose or East Bay and buy a big house here in the Central Valley for around $ 700,000. “

Read the full report on Redfin.com.

About Matthew R. Dailey

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