Crypto + Homebuying: Impacts on the real estate market

June 07, 2022

Impacts of cryptocurrency investing in today's real estate marketing are just beginning to emerge. Here's what you need to know.

Impacts of cryptocurrency investing are just beginning to emerge in homebuying with early applications relating to real estate transactions involving virtual assets. Mortgage loan products that accommodate the use of volatile cryptocurrencies as collateral are also just beginning to appear, allowing homebuyers seeking a traditional mortgage to leverage these in the same way they might offer investment accounts, savings, or other property as collateral.

 

Cryptocurrency in real estate transactions

Crypto is beginning to appear with home purchases, whereby a homebuyer wishes to use cryptocurrency assets to purchase a home by transferring their bitcoin or similar crypto assets to a property seller in lieu of all or part of the contracted purchase price. The feasibility of such an arrangement depends on the seller’s willingness to receive bitcoin in lieu of cash for any portion of the purchase price exceeding the amount they are obligated to direct to mortgage lenders, home equity loan financers or other lienholders.

This is likely to gain traction in some markets sooner than others. For instance, locations with heavy tech industry presence may lead the way since buyers and sellers in those markets may be more likely to be early adopters of using crypto assets for complex transactions like real estate.

 

What homebuyers should consider

Homebuyers should consider that using crypto assets to finance their home purchase could negatively impact their ability to qualify for a mortgage, as underwriters are unlikely to consider such holdings the same way they do other traditional assets given the volatile nature of the crypto market.

The intersection of cryptocurrencies and home purchase transactions will continue to evolve but could become more complicated as the transactions become more commonplace and the traditionally volatile crypto space becomes more regulated. U.S. Bank will continue to monitor and report on crypto trends so that homebuyers can be prepared.
 

Read on to learn how these homebuyers purchased their homes without a twenty percent down payment. 

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Disclosures

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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.