By Jacob Passy
Paying off debt such as a mortgage is one of the best ways to use your coronavirus stimulus check, according to financial experts. Unfortunately, for some Americans, their stimulus checks will barely make a dent in their housing costs.
A new report from real-estate brokerage Redfin /zigman2/quotes/203726414/composite RDFN -3.51% examined how much stimulus checks will help offset housing costs for homeowners and renters in the largest metropolitan areas nationwide. The most recent stimulus package, known as the CARES Act, mandated that Americans receive up to $1,200 in a stimulus check for single taxpayers and up to $2,400 for joint filers.
The amount Americans receive depends on their income, with higher-earning Americans getting a smaller amount — or nothing — in stimulus. Households with children will receive an addition $500 in stimulus funds per child.
Over three-quarters of renters could cover a month of their housing expenses with $1,200, Redfin found. Comparatively, slightly less than half of all homeowners nationwide could cover one month’s mortgage payment with that amount.
But in some cities the money can go quite far. In 12 cities across the country, more than 90% of renters would be able to cover all of their housing costs with their stimulus check. Buffalo, N.Y., leads this pack, because 94% of the city’s renters could cover their rent with $1,200. The median rent in Buffalo is $809.
Here are the 12 cities where over 90% of renters would be able to cover their housing expenses entirely with a stimulus payment:
|Rank||Metro area||Median monthly rent payment||Share of renters who could cover most or all of monthly rent with $1,200||Share of renters who could cover most or all of monthly rent with $2,400|
|3||St. Louis, Mo.||$891||93%||99%|
|7||Oklahoma City, Okla.||$879||92%||99%|
Among homeowners, those in Indianapolis are likely to see their stimulus checks go the furthest. The median monthly mortgage payment there is $1,254, and two-thirds of homeowners would be able to cover most or all of their monthly mortgage and utility payments with the $1,200 stimulus check.
These are the 10 cities where the stimulus checks will go the farthest for homeowners:
|Rank||Metro area||Median monthly mortgage payment||Share of homeowners who could cover most or all of monthly mortgage and utilities with $1,200||Share of homeowners who could cover most or all of monthly mortgage and utilities with $2,400|
|6||Oklahoma City, Okla.||$1,330||62%||90%|
Most of the cities where renters and homeowners are the best off are located in the Midwest and South, where housing costs tend to be the cheapest.
Meanwhile, in pricey coastal markets, the stimulus checks will be of little help to the average renter or homeowner. In San Jose, Calif., and San Francisco, less than 10% of homeowners would be able to cover most of their monthly mortgage and utility expenses with the stimulus check alone.
And in six cities across the country — San Jose, San Francisco, San Diego, Los Angeles, Seattle and Washington, D.C. — less than half of renters could cover their rent with just $1,200, Redfin reported.