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High Stakes, Higher Mortgages: Crypto’s Role in Homebuying Trends

Key Takeaways

  • Crypto profits have enabled low-income families to secure larger mortgages, with balances rising by over 150% since 2020;
  • High crypto-exposure areas saw a 250% surge in mortgage acquisition, fueled by gains from cryptocurrency investments;
  • Researchers caution that high debt-to-income ratios in these households pose risks if economic conditions or crypto markets worsen.
High Stakes, Higher Mortgages: Crypto’s Role in Homebuying Trends

A growing number of lower-income families are channeling profits from cryptocurrency investments into homeownership, a recent US Treasury study reveals. 

The report, prepared by researchers Francisco Ilabaca, Samuel Hughes, Kevin Zhao, and Jacob Lockwood, highlights how these financial gains have enabled larger down payments, facilitating access to substantial mortgages.

Areas identified as "high crypto exposure" have witnessed a rise in mortgage acquisition among lower-income groups. Specifically, the proportion of these households with home loans surged by over 250%, with average mortgage balances increasing from approximately $172,000 in 2020 to around $443,000 by 2024—a jump of 150%.

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High crypto-exposure zip codes—defined as those where more than 6% of households reported cryptocurrency-related tax events—saw the most significant increase in mortgage and auto loan originations. The Treasury study attributes this trend to the influx of crypto-related wealth in these areas.

However, it also points out potential risks tied to such behavior. In many of these regions, low-income families have reported mortgage debt-to-income ratios that exceed recommended thresholds.

While this raises concerns about financial resilience, delinquency rates have remained low so far, indicating that these households are not currently experiencing severe financial distress. Nevertheless, researchers caution that this high leverage could become problematic if broader economic conditions deteriorate or the volatile crypto market crashes.

The report emphasizes that while there is no immediate evidence of financial instability among these households, the increased reliance on high-leverage loans signals potential risks. The researchers stated:

Rising distress in this group could cause future financial stress, especially if exposure to these types of high-leverage, high-risk consumers is concentrated in systemically important institutions.

While cryptocurrency has opened doors for many low-income households, it continues to influence various sectors. Just recently, Rumble made headlines with a $20 million Bitcoin investment, raising questions about its impact on treasury strategies. What drove this daring bet? Read the full story.

Aaron S. Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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