One in nine first-time homebuyers (11.6 percent) surveyed in the fourth quarter said selling cryptocurrency helped them save for a down payment, according to a Redfin report. That’s up from 8.8 percent in the third quarter of 2020 and 4.6 percent in the third quarter of 2019.
“With extra time and a lack of exciting ways to spend money, many people began trading cryptocurrencies during the pandemic,” Redfin Chief Economist Daryl Fairweather said in a release. “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.”
Redfin commissioned a survey of 1,500 residents planning to buy or sell a home in the next 12 months. The report focuses on the 215 of those 1,500 respondents who answered the question “How did you accumulate the money you need for a down payment?” The most common response was “saved directly from paychecks” (52 percent), while less common answers included “cash gift from family” (12 percent) and “pulled money out of a retirement fund early” (10 percent.)
With surging home prices leading to larger down payments, some buyers are finding non-traditional ways to cover the cost and compete with other bidders.
“Crypto is one way for people without generational wealth to win a lottery ticket to the middle class,” Fairweather said.
Digital currencies are also likely on the rise as a payment method among homebuyers because millennials and Generation Z are taking up an increasing share of the housing market. Millennials, who own more cryptocurrency than other generations, now account for more than half of new mortgages.