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COVID savings fuels millennial down payments

by Cate Hoogstraten

Nearly one-third (31%) of first-time millennial homebuyers used money they saved while staying in during the pandemic to make a down payment on their first home, according to a new Redfin survey.

Forty-eight percent of those surveyed said that most of their down payment came straight from their paychecks. Although the job market suffered with the onset of the pandemic, the recorded U.S. personal savings rate also soared to 33.7% in April 2020, up from 7.2% before the pandemic in December of 2019.

The pandemic caused a shift in many people’s homebuying plans – 32% of respondents said the savings enabled them to buy a home sooner than originally planned. Another 37% said they were buying a home later than planned.

New homeowners said one of their primary concerns with buying a house in this market was increasing prices. For 27% of homebuyers, worry over home prices increasing with the recent uptick in the market is a substantial pressure to buy soon.

First-time homebuyers also noted the importance of having outdoor space – 19% said it was the most important feature of the house. Another 18% mentioned the importance of having plenty of space, and 17% wanted privacy within their home.

What homebuyers really want this year is a single-family home with their own outdoor space. They want to sit on the porch, grill, enjoy the sunshine and watch their kids play in the yard,” said Salt Lake City agent Chad Snow in the Redfin press release. “The other important thing is extra space inside the house, whether it’s an extra bedroom or an office. Because so many people plan to continue working remotely, a common thought process is ‘As long as I have enough space in my home and a nice yard, living close to work doesn’t matter so much.’”

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