Millennial Home Buyers Saving For A Down Payment The Old-Fashioned Way

Seventy-two percent of millennial home buyers this year are saving for a down payment directly from their paychecks, up from 69% last year, according to a March survey of 2,000 U.S. homebuyers and sellers commissioned by Redfin. 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 a 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%

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% last year to just 3% 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.