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HOW COVID-19
FINANCIAL
STRUGGLES COULD
EVENTUALLY
HELP DRIVE
HOMEOWNERSHIP
e COVID-19 pandemic has forced
countless changes in every sector, and the
home shopping environment is no exception.
For some first-time homebuyers, many of
whom had to move back into the family home
during the crisis, there could be a silver lining,
according to a study by realtor.com.
Returning home for a period of time,
rent-free, could mean a real opportunity to
save for a down payment on a home.
Saving for a down payment is one of the
biggest barriers to homeownership, according
to a press release from realtor.com. "For the
record number of young adults who moved
back home during the pandemic fortunate to
still have a job, homeownership may be more
attainable than they think."
For someone paying the U.S. median
one-bedroom rent of $1,533, it would take
11 months to save $17,000, a 5% down
payment for a $340,000 home, the median-
priced home in the U.S., according to realtor.
com's analysis of listing and rental data for
the U.S. and the nation's 20 largest metros in
December 2020.
"Although many members of the
millennial and Gen Z generations were
forced to move home because they lost their
jobs in 2020, others chose to forgo their
rental because they had the opportunity to
work remotely and preferred to wait out the
pandemic with family," said realtor.com Chief
Economist Danielle Hale. "For those who
have been able to channel their would-be rent
into savings, the pandemic's silver lining could
be becoming a homeowner sooner than they
otherwise would have."
At a local level, in Chicago, for example,
based on the median rent for a one-bedroom
apartment of $1,521, it would take 11 months
to save $16,350, a 5% down payment on
the median list price home of $327,000. At
the opposite end of the spectrum, in Los
Angeles, where the median list price for a
home is just under $1 million and the median
one-bedroom rent is $2,250, it would take 22
months to save for a 5% down payment of
$50,000.
