and Bitcoin
may be on the way to the moon, it appears that cryptocurrency is also helping Earth-bound homebuyers secure their dream properties.
What Happened: According to a new survey from the brokerage Redfin
, roughly one in nine first-time homebuyers (11.6%) said selling cryptocurrency during the fourth quarter of 2021 helped them save for a down payment.
This percentage is up from 8.8% in the third quarter of 2020 and 4.6% in the third quarter of 2019.
The survey, which polled 1,500 U.S. residents planning to buy or sell a home in the next 12 months, found that crypto sales nearly tied “cash gift from family” (12%) as a down payment source and bypassed “pulled money out of a retirement fund early” (10%). And while the most common response to accumulating down payment funds was “saved directly from paychecks” (52%), the increased popularity in crypto is changing how homebuyers prepare for purchasing their next residence.
“With extra time and a lack of exciting ways to spend money, many people began trading cryptocurrencies during the pandemic,” said Redfin Chief Economist Daryl Fairweather.
“Some of those investments went up in smoke, but others went ‘to the moon,' or at least rose enough to help fund a down payment on a home.”
Fairweather noted that digital currencies were likely on the rise as a payment method among homebuyers because millennials and Generation Z are making their respective presences known in the housing market — and millennials, who own more cryptocurrency than other generations, now account for more than half of new mortgages.
“Crypto is one way for people without generational wealth to win a lottery ticket to the middle class,” Fairweather said.
What Else Happened: But even after having enough funds for a down payment, many homebuyers are finding problems locating a property to purchase. Redfin also reported that active listings of homes for sale for the four-week period ending Jan. 2 fell 27% from one year ago.
Furthermore, the median home-sale price increased 14% year-over-year to $358,460, just shy of breaking an all-time high.
“We’re kicking off yet another year with a whole lot of buyers whose home search has been ongoing for months, and they are as eager as ever,” Fairweather observed. “This month, the stage will be set for the 2022 housing market, and we’ll be closely watching whether prices climb like they usually do in January or whether they start off high and stagnate.”
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