Cryptocurrency and US housing market

The U.S. housing market is closely tied to the economic health of the nation. Perhaps no historic incident illustrated this vital tie better than the 2008 financial crash when the nation’s subprime mortgage crisis triggered a financial meltdown across the entire economy.

Ten years later, has the housing market recovered? Figures such as Trulia Chief Economist Ralph McLaughlin argue that the answer is complicated: while in some areas prices have improved, true recovery might take until 2025. Furthermore, problems such as affordability and high realtor fees continue to present obstacles to ordinary home buyers and sellers.

New technologies inject both new risks and new potential for stable economic growth into a complicated housing market. Cryptocurrency is sweeping the financial world, and blockchain evangelists argue that the technology will change sectors ranging from healthcare to energy production. Cryptocurrency is affecting the health of the U.S. housing market too. Here’s how:

Buying Homes with Bitcoin

Buying and selling homes with cryptocurrency is still far from typical, but these purchases are occurring with increasing frequency. Many individuals in and around tech hubs such as San Francisco hold substantial cryptocurrency assets and are interested in using those assets to make significant purchases such as homes. Though many crypto purchasers ultimately exchange their tokens for cash before transmitting the payment to the seller, Ivan Pacheco made history in late December 2017 when he directly traded 17.741 bitcoins for a Miami condo.

So far, most crypto property purchases have been wealthy individuals acquiring second homes, not first-time or middle-class homebuyers. Proponents for increasing use of cryptocurrency in home buying and selling, such as Florida-based listing company CryptoHome, argue that cryptocurrency property transactions are faster and more efficient than equivalent fiat property purchases.

But cryptocurrency’s volatility can make it an unstable purchasing tool for first time home buyers and sellers; a sum of cryptocurrency that seems massive when the two parties agree on a deal could be worth half of its original value by the time the funds are transferred. Escrow holders, mortgage providers, government collectors of tax payments, and other members of the sale ecosystem might be less willing to work with cryptocurrencies, making an all-crypto sale difficult even if both buyer and seller are on the same page.

Tackling Affordability

Affordable housing is an issue all over the United States. Cryptocurrency is creating new real estate platforms and investment vehicles, but many of these new tools serve high-income rather than low-income populations. Renting blockchain company Rentberry, for example, has drawn…