More lower-income households are using profits from crypto investing to secure mortgages, according to a report by research economists at the U.S. Treasury.
In their findings, researchers Samuel Hughes, Francisco Ilabaca, Jacob Lockwood, and Kevin Zhao stated, “Crypto sales may have supported access to larger mortgages through bigger down payments.”
They added, “The increase in borrowing is especially striking among low-income households in high crypto exposure areas.”
The report revealed that the percentage of low-income households with mortgages in high crypto-exposed areas rose by over 250%.
Additionally, the average mortgage balance in these areas increased significantly, climbing from approximately $172,000 in 2020 to about $443,000 in 2024—a 150% jump.
“Zip codes with the highest crypto exposure saw the largest increase in mortgage and auto loan originations and balances over subsequent years,” the report noted.
To identify high crypto exposure areas, the study used tax data, classifying a “high-crypto” zip code as one where more than 6% of households reported a crypto tax event.
However, the report raised concerns about financial stability.
Low-income households in these high-crypto areas reported mortgage debt-to-income ratios significantly above recommended levels, suggesting potential financial vulnerability.
“High crypto exposure may be associated with behavior that may contribute to financial instability,” the researchers warned.
Despite these risks, delinquency rates in these areas have remained low, indicating no immediate signs of distress.
Nonetheless, the report cautioned that high leverage in these households could pose future risks if economic conditions deteriorate.
