The average tax refund was $2,860 for the majority of Americans last year. According to a survey by GO Banking Rates, 41 percent of Americans plan to save their tax returns. That savings could help put them on the path to homeownership.
Six percent of 18- to 34-year-olds say they plan to use their tax refund to purchase a car, home, etc., compared to 9 percent in the 35- to 44-year-old age group.
“With higher incomes and a tax refund of approximately $2,860, those who are most likely to purchase may actually be in good shape financially when it comes to being a future homeowner,” according to NAR’s Economists’ Outlook blog, which details the study. “While some may not have planned to use all or part of that $2,860 this year, next year is still a good strategy to plan ahead to use that refund or part of it for that down payment.”
Take a look at the data from NAR’s 2017 Home Buyer and Seller Generational Trends:
- First-time buyers made up 35 percent of all homebuyers, an increase over last year’s near all-time low of 32 percent.
- Sixty-six percent of buyers 36 years and younger were first-time buyers, followed by buyers 37 to 51 years at 26 percent. (First time home buyers group would use between six and nine percent to invest) (Second group 37-51 years would use 31%-41% of their tax return to put into savings)
- At 34 percent, buyers 36 years and younger continue to be the largest generational group of homebuyers with a median of 31 years old.
- Home buyers between the ages of 37 and 51 were reported to have the highest household incomes among any other generation at $106,600, followed by buyers between 51 and 60 that had an income at $93,800 (down from $100,200).
Source: “Use Your Tax Refund for a Down Payment,” N.A.R. Economists’ Outlook (April 2017)