Wondering where first-time homebuyers are getting the money for today’s increasingly exorbitant down payments? Those stimulus checks most of us received from the government, for one.
A recent survey of 215 first-time buyers shows what some economists have suspected all along—that many people took those pandemic relief checks (three rounds totaling up to $3,200 per person in 2020 and 2021) and applied them toward down payments. As the chart below shows, it was the second-most common answer the real estate firm Redfin received from survey respondents who were asked how they accumulated the money for a house.
As houses have been in high demand (thanks partly to work-from-home trends) and home prices have risen rapidly, so have the size of down payments. The median down payment in the third quarter of 2021 was $27,500, 41% higher than a year earlier, according to a recent report from ATTOM Data.
“Plenty of Americans, particularly those who are in a position to buy a home, are now in a better financial position than before,” Redfin Chief Economist Daryl Fairweather said in a statement. “Stimulus payments provided a lot of Americans not only with necessary relief, but extra money in their pockets."
Have a question, comment, or story to share? You can reach Diccon at firstname.lastname@example.org.