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The first stimulus checks will land in the bank accounts of millions of Americans this week. As part of the record $2 trillion economic relief package enacted last month, individuals are to receive $1,200, while couple will get double that amount in addition to $500 per every dependent child. And, they have already decided how to spend the funds.
According to a survey by personal finance site Creditful.com, about 28% of Americans – or one in four – will put their stimulus payments toward covering their rent or mortgage (most will use them to purchase groceries and pay bills). Millennials are mostly likely to spend their checks on housing.
According to data analyzed by technology-focused real estate brokerage Redfin, three-quarters of U.S. renters could cover their monthly housing expenses with a $1,200 stimulus check, while about one half of homeowners could.
The financial prowess of the checks also depends on where individuals live. For example, $1,200 – even $2,400 – can amount to only a fraction of rent and mortgage costs in metros with high real estate values such as San Francisco, Los Angeles and New York.
According to Redfin, residents of San Jose, California, will see the least financial benefit of the one-time stimulus checks. There, only 6% of homeowners and 22% of renters can pay for housing with $1,200 a month, while 27% of homeowners and 60% of renters can do so with $2,400.
Nationally, the median home loan payment is nearly $1,600, Redfin says, which means that $1,200 would be enough to pay monthly mortgage and utilities for 47% of Americans, while $2,400 could cover these costs for 80% of U.S. homeowners.
The country’s median rent, on the other hand, is a little over $1,000.