The post Crypto Gains Let Poor People Buy Homes, Treasury Research Finds, But Risks May Lurk appeared on BitcoinEthereumNews.com.

Crypto investing may have allowed lower-income Americans to buy their own homes at a higher rate than the rest of the population, according to a paper released Tuesday by the U.S. Treasury’s Office of Financial Research. The rise in cryptocurrency investment in recent years came with a pronounced uptick in debt — most notably mortgages — sought in the areas where digital assets activity was highest, according to the research conducted by the Treasury’s independent arm that sniffs out U.S. economic hazards. It was looking for evidence that such financial stretching may be a danger to U.S. stability, but so far the researchers found that delinquency rates in those places have remained low. “Low-income consumers in high-crypto exposure areas are disproportionately more likely to take out a mortgage, and the average mortgage size is large relative to pre-2020 average income,” the paper concluded. “There is little or no evidence of higher levels of distress in mortgage, auto, or credit card debt among consumers in high-crypto exposure neighborhoods,” according to the report. “If anything, delinquency rates remain relatively low.” This potentially sunny piece of federal research could further bolster the case of incoming presidential administration officials who seek to clear a path for greater U.S. crypto adoptions. President-elect Donald Trump is expected to appoint financial regulators who favor friendly regulations and lighter enforcement in the digital assets sector. The OFR paper cautioned that these crypto households will warrant close observation in a financial downturn to see if such stresses expose them as a risk to the U.S. mortgage market. Cryptocurrencies have remained a much more volatile investment than most other asset classes. “An important takeaway for future monitoring is the increased debt balances and leverage among low-income households with crypto exposure,” the report noted. “Rising distress in this group could cause…

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Filed under: News - @ November 26, 2024 10:22 pm