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Balances of traditional savings and checking accounts have stagnated, but Americans are continuing to spend at surprising levels. It’s a disconnect that has puzzled economists: If bank balances aren’t growing, where is all this financial bravado coming from?
New research from the JPMorganChase Institute offers an explanation. After analyzing the financial activity of 4.7 million U.S. households, the institute found that Americans aren’t necessarily out of cash—they’re just parking it somewhere else.
Many are diverting funds from low- to no-interest-earning checking and savings accounts into higher-yield vehicles like money market funds, certificates of deposit, and brokerage accounts that offer better returns.
It’s a reshuffling that could have big implications for the housing market. While down payment affordability remains one of the biggest hurdles for homebuyers, the institute’s findings suggest many would-be buyers might have more financial flexibility than traditional banking data reveals.
Cash isn’t gone, it’s just somewhere else
At first glance, household finances seem strained. Traditional bank balances (i.e., checking and savings accounts) remain well below expectations. Since 2019, median balances have grown just 23%, far short of the 40% expected growth over that six-year span, according to the report.
But that’s only part of the picture.
Looking beyond traditional bank accounts to brokerage accounts, CDs, and money market funds, total cash reserves were up 3% to 5% year over year as of May 2025, signaling a return to positive growth.
This shift helps explain why many households continue to spend confidently, even as traditional savings data paints a more cautious story. And it could be an encouraging sign for a housing market that has been dogged by affordability barriers for years.
“We’re definitely seeing more clients diversify where they keep their cash,” says Alex Shekhtman, CEO and founder of LBC Mortgage.
“High-yield accounts, CDs, money market funds—these used to be afterthoughts. But now, they’re part of the homebuying conversation. For some, it’s about chasing returns while they wait. For others, it’s a strategy to outpace inflation while their plans take shape,” he adds.
Why now? High rates are changing behavior
After years of punishing inflation, Americans are rethinking where they keep their money. With everyday costs stubbornly high and housing affordability stretched thin, many believe they can’t afford to let their cash sit in low-interest checking or savings accounts. Instead, they’re turning to higher-yield options where their savings can grow more meaningfully while still remaining relatively accessible.
“Buyers are thinking more like investors,” explains Shekhtman. “They’re not just letting money sit idle in checking accounts anymore. They’re trying to make every dollar work harder—which I actually think is a good thing, as long as they understand the timing and liquidity issues.”
The move to optimize yield also functions as a hedge against inflation. Even modest returns from short-term CDs or money market accounts help households preserve the value of their cash. It’s a crucial advantage when inflation slowly but consistently eats away at the value of saved cash and the average time to save for a down payment is 12 years.
But Shekhtman emphasizes that hopeful homebuyers turning to higher yield options need to be aware of liquidity trade-offs.
“Are buyers better off parking cash there? If they’re still a few months out [from purchasing a home], yes—especially if they want to feel like they’re not losing ground,” he says. “But if they’re close to making an offer, keeping it liquid and ready is still the safest play.”
What it means for homebuyers today (and tomorrow)
The bigger and better wallets that more Americans are finding for their cash have even larger implications for the housing market, especially when it comes to how lenders evaluate buyer readiness.
Many buyers today might be more financially prepared than they appear, but traditional metrics that focus on checking and savings account balances could underestimate just how much cash a household can access.
Down payments might not always come from a standard savings account anymore, but instead be drawn from money market funds, short-term CDs, or even conservative brokerage accounts. From the lender’s perspective, that means new complications.
“If a client’s funds are in a CD or brokerage, we have to see accessibility—can the money be pulled without penalty? Is it seasoned? Can it be documented properly?” Shekhtman explains. “It’s not a deal breaker, but it’s something buyers need to prep for ahead of time so there are no surprises during underwriting.”
It’s a balancing act for homebuyers as they fight persistent affordability challenges and inflation in the market: How can they protect their savings while also demonstrating the liquidity needed to close on a home.
Even modest growth in these higher-yield accounts can help buyers reach financial milestones faster, especially first-time buyers and renters working toward their first home. But documentation and timing matter more than ever.
“Overall, this does reflect a growing financial awareness,” Shekhtman says. “People are paying more attention, asking better questions, and thinking more strategically—not just about buying a house, but about how to stay financially healthy while doing it.”
Whether this becomes an enduring trend remains to be seen, Shekhtman says. “But for now, it’s clear: Buyers are more tuned in than ever before.”