Stimulus cheques and a lack of opportunity to spend money pushed the saving rate to a record high last year. Some of that saving made its way into down payments, with the average first-time buyer putting down an extra 30% in November compared to a year earlier. We doubt that was a key driver of the surge in home sales, but we do think it contributed to the rapid acceleration in house price growth. The saving rate is set to fall back this year, but the large stock of cash built up over the past year will keep down payments relatively high. In turn, that will provide support to house prices over the next year or so.
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