Homeownership is a dream cherished by millions of Americans. A survey by LendingTree revealed that over 40% of Americans aim to move to a new home in 2022, and nearly half of this group (46%) are hoping to buy a new home.
In 2021, the rate of homeownership grew to 65.5%, after reaching its peak of 69.9 % in 2004 before the crash of 2008. For corporates who work with homeowners, here’s what you need to know about the current consumer trends around homeownership.
Rise of Crypto Ownership
Owning a home is an essential aspect of wealth creation that helps build generational wealth that can be passed on. Besides saving every month, investing smartly and consistently creates an opportunity for investments to compound over time. Savvy investors leverage their earnings and make wise investments to buy homes. One investment mode that is attracting new investors, every day is cryptocurrency. As of 2021, crypto ownership spanned 300 million crypto users worldwide, and over 18,000 businesses accept payments in cryptocurrency.
Homeownership Goals
Investments aim to meet long-term and short-term life goals. This can include building a corpus for a comfortable retirement, planning for going back to school or a child’s education, taking a world trip, or owning assets such as real estate.
According to a survey, in 2021, 12% of first-time homebuyers leveraged their crypto earnings to save for a down payment. In the third quarter of 2019, this figure stood at just 4.6%. In the case of lenders and mortgage bankers, it’s important to know how much of your client’s finances are from cryptocurrency in order to leverage trust.
Cashing Out
Like the stock market, cryptocurrency empowers retail investors to build wealth at a faster rate. Although it comes with its risks, investors with a time horizon of 2 to 10 years and beyond can capitalize on crypto opportunities through consistent investing. Popular cryptocurrencies include Bitcoin, Ethereum, Dogecoin, and Shiba Inu.
However, it is to be noted that investors will need to cash out their earnings into a bank account to be able to use them to make transactions since the real estate ecosystem does not currently accept payments in cryptocurrency.
Making a Higher Down Payment
Most consumers do not have the funds to buy a home upfront. In all probability, they will be taking a loan, making a down payment, and then paying monthly payments for several years. According to most personal finance experts, it is advisable to make a down payment of at least 20% when you plan to take a loan to buy a home. The higher the down payment, the less funding required, resulting in fewer installments and a lower rate of interest.
Since cryptocurrency is taking off, more people will likely be able to afford a higher down payment straight off the bat.
The Takeaway
Buying a home is a huge task for any American, and crypto and other wealth-creation instruments are soon becoming instrumental in defining the homeowner journey. This means an increased need for title insurance companies, mortgage bankers, real estate attorneys, and more to perform title searches and other due diligence.
At Real Title Services, we pride ourselves on quick, error-free, and nationwide title searches. To learn more, contact us today!