Is Crypto the New Down Payment? For Some, Yes

Millennials find a nontraditional way to afford a home

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A new generation of homebuyers is using new ways of financing a down payment: cashing out cryptocurrency profits. 

One in nine, or 11.6%, first-time homebuyers said last quarter that they sold cryptocurrency to help pay for their down payment, according to a survey by real estate company Redfin, almost as much as those who said they used a cash gift from family (12%) and more than those who pulled money early from retirement funds (10%).

Saving from a monthly paycheck continues to be the number one way people pay for their down payment (52%). Still, the share of people using crypto gains to finance their home purchases is growing. The Redfin survey showed it was up from 8.8% in the third quarter 2020 and 4.6% in the third quarter 2019. 

Part of the reason for the rise, Redfin said, is that millennials, who own more cryptocurrency than other generations, now account for more than half of new mortgages.

“With extra time and a lack of exciting ways to spend money, many people began trading cryptocurrencies during the pandemic,” said Daryl Fairweather, Redfin’s chief economist, in a statement. “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.”

Bitcoin, the most popular cryptocurrency, climbed to a record high nearly $69,000 last November from about $7,300 at the start of 2020. Since the November peak, it has fallen to under $42,000 on Friday.

The Redfin report was based on a survey of 1,500 people, of whom 215 answered the question about how they accumulated the money needed for their down payment. The survey was conducted Dec. 10 to Dec. 13 by research technology company Lucid on behalf of Redfin.

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  1. Redfin. “12% of First-Time Homebuyers Sold Crypto to Help Fund Down Payment: Survey.”

  2. CoinMarketCap. “Bitcoin Price Today, BTC to USD Live, Marketcap and Chart.”

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