Government stimulus funds are assisting folks in realising their ambition of owning a home.
According to a recent Redfin analysis, roughly one in every four first-time homebuyers is using federal stimulus money to help put together a down payment.
The information comes from a poll of 1,500 people in the United States conducted in December. 24 percent of the 215 people who said they wanted to buy their first house within the next year said they had saved stimulus money to help them save for a down payment.
The most common method of saving money for a down payment was the most traditional: 52 percent of respondents said they saved money directly from their paychecks.
Others claimed they were able to save money during the pandemic (24%), or that their down payment was at least partially funded by working a second job (22%), or that they received an inheritance (22%). (17 percent ). Some even claimed that the cryptocurrency markets aided their down payments: 12 percent of respondents said that revenues from the sale of crypto investments aided their down payments.
Americans’ savings were boosted thanks to stimulus checks
Despite the economic turbulence in the early days of the pandemic, Redfin Chief Economist Daryl Fairweather noted in a statement accompanying the survey that “plenty of Americans, particularly those in a position to buy a home, are now in a better financial situation than before.” This is largely due to the fact that “stimulus payments gave a lot of Americans not only with much-needed relief, but also with additional money in their pockets,” she explained.
The federal government has approved three rounds of stimulus grants totaling up to $1,200, $600, and $1,400 since the start of the coronavirus outbreak. Parents received further aid in the form of advance payments of a greatly enlarged child tax credit.
Many experts credit that emergency cash with keeping many American households solvent during the worst of the recession. According to a University of Michigan study, financial instability decreased by 43% between December 2020 and April 2021, as assessed by the share of individuals with children in U.S. Census data who reported it was very difficult to pay for household costs in the previous week.
According to a study by the Peter G. Peterson Foundation, while most Americans spent the first round of payments on necessities like food and rent, they were more inclined to preserve a portion of the future rounds.
Of course, some analysts have suggested that all of the federal stimulus money has contributed to inflation, which has risen by 7% year over year, helping to drive up prices of everything from groceries to gasoline — not to mention rent and property prices.