Redfin Survey: More Millennial Homebuyers are Saving for a Down Payment the Old-Fashioned Way, Fewer Getting Help from Family
24 Percent of Millennials Took a Second Job to Save for a Home; 18 Percent Received Cash from a Family Member
SEATTLE, April 29, 2019 /PRNewswire/ -- (NASDAQ: RDFN) -- Seventy-two percent of millennial homebuyers this year are saving for a down payment directly from their paychecks, up from 69 percent last year, according to a March survey of 2,000 U.S. homebuyers and sellers commissioned by Redfin (www.redfin.com), the tech-powered real estate brokerage. Over 500 respondents born between 1981 and 1996 responded to the survey. Redfin compared the results with those from a similar survey commissioned in March 2018.
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 Daryl Fairweather. "Millennials have never worked in an economy this strong before, and are now finally making enough from their paychecks to save for a home. The fact that they are less often needing to rely on family members or sacrificing retirement savings to fund a home purchase is another sign that millennials are finally gaining their financial footing."
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, Bitcoin, the most popular cryptocurrency, was trading at around $10,000 for one bitcoin. As of this past March, that had fallen to under $4,000.
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/
About Redfin
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 Canada. The company has closed more than $85 billion in home sales.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, subscribe here. To view Redfin's press center, click here.
SOURCE Redfin
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