For nearly one-third (31 percent) of millennial first-time homebuyers, the ability to save extra money during the pandemic helped them accumulate the money needed for a down payment, according to a recent Redfin survey.
Nearly half (48 percent) of the millennial first-time buyers surveyed saved money directly from paychecks for their down payment, while 27 percent worked a second job, 20 percent got cash gifts from family and 19 percent sold stock investments.
While many workers were furloughed during the pandemic, those who stayed employed were able to save more money than usual as they spent less on eating out, travel and in-person events. The U.S. personal savings rate rose to 33.7 percent in April 2020 from a pre-pandemic rate of 7.2 percent in December 2019, according to the U.S. Bureau of Economic Analysis.
The popularity of remote work is fueling demand for spacious homes and motivating people to move to entirely different areas, according to Redfin.
“Roughly half of my clients are people moving to the Central Valley from the Bay Area because they want to live in a bigger home for less money, and a lot of them only need to commute into the city once or twice a week, if that,” California Central Valley Redfin agent Steven Majourau said in a release.
Homebuyers surveyed said they are looking for private outdoor space (19 percent), plenty of living space (18 percent) and privacy from neighbors and passersby (17 percent.) Concerns for house hunters included rising home prices (27 percent) and being able to afford a home they love (25 percent.) Roughly 20 percent of survey respondents cited each of the following concerns: rising mortgage rates, ability to secure a loan, not having enough money for a down payment and concerns about the economy.
“After months of home prices rising dramatically, buyers are well aware that homes are more expensive now than they were a year ago or six months ago,” Redfin Chief Economist Daryl Fairweather said. “Even though people are prioritizing things like space and privacy in their home search, rising prices mean a lot of buyers will need to make compromises to avoid going beyond their financial comfort zone.”