Homebuyers Planned to Sell Stocks for Down Payments. Is That Up in Smoke?

About 20% of house hunters said they anticipated selling off their stocks to put together a prospective down payment.

However, the stock market manipulation from the on-again-off-again tariff announcements could put an end to those purchasing plans and force people to hold off or look for alternatives to save.

Taking stock

Liquidating stock portfolios has been a way some people used to buy their home or are planning to.

A survey from Redfin revealed 20% of house hunters expected to sell their stocks in order to fund their down payment. It also showed 13% of homeowners sold stock investments for their down payment, 10% have done it to pay their mortgage. Meanwhile, a 6% share of renters did it to afford rent.

Although, with tariff rug pulls leading to huge daily market swings — alongside questions of insider trading — this manufactured volatility and the uncertainty ahead will likely cause many to pause their homebuying plans.

“Big drops in the stock market not only cut into funds earmarked for down payments and other housing costs, they shake consumer confidence and make people feel poorer in general,” said Chen Zhao, economic research lead at Redfin. “And this comes at a time when people are bracing for the price they pay for all kinds of things to rise as tariffs go into effect.”

While a depleted stock market tends to push mortgage rates down, many other factors determine the path of interest rates. Additionally, unilateral higher prices from tariffs will also reduce affordability.

“Some prospective buyers are pulling back because they’re worried about volatility in the stock market,” said Heather Mahmood-Corley, a Phoenix Redfin agent. “In my area, this is mostly a concern for buyers in their 50s and older. Many of them are retreating from the housing market because a lot of the money they’d use to pay for housing is sitting in their stock portfolios, and they just don’t know what’s going to happen.”

According to the Federal Reserve, about 68.8% of homeowners and 36.9% of renters own stock as of 2022.

Redfin’s survey had 13 options of how potential homebuyers planned to save for a down payment, and surveyees could choose any that applied. Selling off their stock portfolios was the third-highest response at 20% behind 48% saving directly from paychecks and 29% working second jobs.

The bottom line for home buyers

Those with plans to sell stocks to fund their down payment may be seeing those plans fade in real time with the market’s tariff-induced downslides.

Prospective home buyers can save in other ways, however, and should see if they qualify for financial assistance as well as shop for their mortgage rate.

If you’re ready to buy a home, get yourself prepared and talk to a local mortgage professional today.