PROSPECTIVE homebuyers may soon have an alternative way to pay for a home thanks to a game-changing policy switch, gaining a leg up in the housing market.
As the value of cash shrinks, Americans turning to a popular cryptocurrency can beat inflation and boost their return on investment, making the prospect of homeownership a reality.
A game-changing policy may help first-time homebuyers and young Americans enter the housing market[/caption]
The policy change, if implemented, would offer an alternative way to pay for a home that outpaces cash in terms of inflation[/caption]
Entering the housing market is a daunting prospect for many young Americans thanks to soaring housing costs and high interest rates.
Nearly 86% of renters shared that they wanted to purchase a house but did not have the financial means to do so, with 54% of those saying it was “unlikely” they’d ever be able to, per a CNN survey from July 2024.
Homeownership may soon become possible for more Americans thanks to a game-changing policy switch involving Bitcoin, the first decentralized cryptocurrency.
At the end of last month, the US Federal Housing Finance Agency directed the Federal National Mortgage Association, or “Fannie Mae,” and the Federal Home Loan Mortgage Corporation, or “Freddie Mac,” to count Bitcoin as an asset on single-family home mortgage applications.
Mortgage applicants previously were required to convert the cryptocurrency into US dollars in order for the Bitcoin to count.
This move could be a major win for prospective homeowners as the value of the US dollar shrinks amid rising housing costs.
It is part of the Trump administration’s larger goal of making America the “crypto capital of the world,” according to William J. Pulte, director of the US Federal Housing Finance Agency.
The prospective policy is currently just a directive, which would apply to all crypto “evidenced and stored on a US-regulated centralized exchange” if it were to become the standard.
HOME HELP
Bitcoin could be a viable entry point into the housing market, considering how much it has already soared in value.
The price of Bitcoin was $17,000 in 2022, and today, the price has exponentially increased to $107,000.
Those who bought Bitcoin in 2012, when it was trading for under $100, would be able to purchase just about any kind of home they could dream of today.
The value of Bitcoin is expected to spike even further, with top investors projecting that the cryptocurrency will reach $1 million within the next five years.
That is a more than tenfold increase from the coin’s current value of $107,000, making Bitcoin a tempting investment for prospective homeowners as the value of the US dollar diminishes.
Bitcoin, unlike our standard currency, is a disinflationary asset.
What is Bitcoin?
Bitcoin is the first and most well-known example of a new kind of money called cryptocurrency.
Bitcoin exists only on the internet, with no physical coins or bills.
Unlike traditional currencies controlled by governments and central banks, Bitcoin is not managed by any single entity, meaning that no single authority can control its value.
Bitcoin allows for direct transactions between users anywhere in the world, with the “blockchain” being the technology that powers the cryptocurrency.
New Bitcoins are created through a process called “mining,” which involves powerful computers solving complex mathematical problems to verify and add new transactions to the blockchain.
There is a limited supply of Bitcoin, with only 21 million coins to ever be created. This scarcity is a key reason why some people consider it a store of value, similar to digital gold.
Its supply is capped at 21 million coins and the rate at which new coins are created is programmatically cut in half roughly every four years, guaranteeing that its inflation rate decreases over time.
This means that the increasingly popular cryptocurrency is a potential way to beat out inflation, a helpful prospect when it comes to buying a home.
The cryptocurrency is also conveniently widely available to everyone, not just accredited investors.
It also doesn’t take millions of dollars to purchase Bitcoin, as you do not need to purchase a whole Bitcoin to invest.
Bitcoin was intentionally designed to be highly divisible, with the smallest unit of a Bitcoin called a “satoshi” – one hundred-millionth of a single Bitcoin.
Most cryptocurrency exchanges allow investors to buy Bitcoin with just a few bucks, meaning that you could be well on your way to purchasing a home in just a few years’ time.
However, potential investors should be aware that Bitcoin is a highly volatile asset, and its value can fall just as quickly as it can rise.
If you’re looking to purchase your first home, you may qualify to receive $60,000 through a new program – there is still time to apply and no waitlist.
Plus, check out the story on a young woman who bought her first home at 26 on a $45,000 salary – she did it with no savings or help from her parents.
