Nearly 1 in 4 people planning to buy a home in the next 12 months set aside stimulus money for the transaction, a Redfin survey shows.
Nearly a year after the final round of government stimulus checks went out, this money could still be fueling down payments for first-time homebuyers, a new survey suggests.
“Stimulus payments provided a lot of Americans not only with necessary relief, but extra money in their pockets,” Redfin Chief Economist Daryl Fairweather said in the report. “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 stimulus money was the second-most common source of down payment savings among prospective buyers. More than half of these buyers reported setting aside money directly from their paychecks toward their home purchase.
“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,” Fairweather said. “But plenty of Americans, particularly those who are in a position to buy a home, are now in a better financial position than before.”
In addition to income from employment and the stimulus, hopeful buyers reported impacts from the coronavirus pandemic allowed them to save extra money on expenses. Some reported working second jobs to save the extra cash.
But the stimulus money appears to have made a meaningful difference in Americans’ efforts to save for their first home.
The money came from a series of government spending measures intended to soften the economic blow of the COVID-19 pandemic. The average family with children received $6,660 in 2021 through the stimulus and expanded child tax credit, according to the report.
According to home market numbers tracked by Redfin, the typical home sells for $382,900. Buyers generally put down at least 3 percent, which would amount to roughly $11,500 — although most put down closer to 10 percent.
The survey identified other ways that prospective first-time buyers have been saving for their home purchase.
Receiving an inheritance was a contributing factor for 17 percent of first-time buyers who were surveyed. Roughly 15 percent said they sold stocks they owned to help come up with cash, while 12 percent sold crypto assets.
For 1 in 10 people looking to buy a home soon, the effort to save up for the purchase has involved pulling money they had set aside for retirement. About 1 in 12 said they reduced their retirement contributions.
Cash gifts from family helped 12 percent of would-be buyers save up for their homes, according to the survey.
The survey, conducted in December, featured responses from 1,500 people — first-time and repeat buyers — who said they intend to buy a home in the next 12 months. Of that number, 215 people were first-time buyers who responded to the down payment question.