Redfin asked all first-time homebuyers the question: "How did you accumulate the money you need for a down payment? Select all that apply." Compared to a year earlier, every category but saving from primary earnings declined:
- Earnings from secondary job: 24% down from 36% last year.
- Cash gift from family: 18%, down from 24%
- Sold stock investments: 9%, down from 13%
- Pulled money from a retirement fund early: 7%, down from 13%
- Contributed less to retirement savings: 6%, down from 12%
- Inheritance: 6%, down from 12%
The fact that millennial homebuyers are increasingly able to save money for a down payment and becoming less reliant on non-traditional funding methods likely has to do with the fact that wage growth for American workers hit a 10-year high in February after several years when wage growth fell far short of home price growth. The combination of strong wages and the housing market stalling late last year means that more buyers are able to save for their down payment using their primary income alone.
"Unemployment is at its lowest point since 2000," said Redfin chief economist
It's also notable that compared to a year ago, the share of millennial respondents who sold cryptocurrency to fund a down payment fell dramatically, from 10 percent last year to just 3 percent in 2019. This is likely due to a similarly dramatic decline in the price of the digital asset. In early 2018,
For the full report complete with a chart detailing the aggregate survey responses, visit: https://www.redfin.com/blog/how-millennial-homebuyers-save-for-down-payment/
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. and
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