Lottery winner? Now is the time to buy your dream home
Supersized lottery jackpots may have some people fantasizing about what they would do with the funds if they won, whether that would be buying a home, paying off debt or saving.
It is, however, an even more important question for those who actually do win the lottery, like the lucky person in New Jersey who just scored a nearly $1.13 billion windfall from Mega Millions on Tuesday. Lottery winners are faced with many options.
Some winners of past jackpots or even smaller prizes have said they planned to go the homebuying route. For example, a North Carolina man who landed $1 million from a Mega Millions ticket in 2023 indicated he had plans to use it on getting a home.
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That has also happened for lottery-winning participants that appear on the HGTV series "My Lottery Dream Home" and, according to a recent Realtor.com report, the show offers insight on what houses they purchase. They reportedly often defy preconceived notions some may hold of lottery winners.
The properties that many "My Lottery Dream Home" participants with lottery prizes wind up purchasing tend to be on par with and at times below the $406,700 national median, according to the real estate-focused site.
In a statement to FOX Business, Realtor.com Executive Editor Judy Dutton said home purchases by those who win the lottery are typically not extravagant, something she said stems from it being "much more common for lotto winners to win much less money" than the "rare mega-winners."
"And even in cases where people do win a lot, even in the millions, they don’t necessarily want to blow it all on a huge house," Dutton said.
Plenty make home purchases that afford them the room to easily host their families, according to Realtor.com.
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"The majority of lotto winners on ‘My Lottery Dream Home’ shop for homes with plenty of extra bedrooms, or even entire guest suites, where their grown kids and grandkids can sleep over comfortably," Dutton said, noting it pushed back on the idea lottery winners want to keep their success to themselves.
Others have financially helped loved ones with acquiring a house, Realtor.com reported.
"My Lottery Dream Home" participants also tend to relocate within their area and to forgo exotic new places when they spend winnings on homes, according to the site.
They go with older homes instead of luxury ones in many instances "proving that cutting-edge style and upgrades aren’t always big priorities," Dutton said.
Using funds from a lottery price to acquire a home can be a "great idea," Northwestern Mutual Wealth Management Advisor Andrea Williams told FOX Business.
"Buying property gives you a place to live without sending your money to someone else, which you do when renting," she said. "You get to own an asset that will typically increase in value overtime."
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She recommended lottery winners looking to buy real estate consult a financial professional and keep in mind yearly expenses a person encounters with a house.
"When buying a home and budgeting, there’s an additional 2-4% of the house value going toward annual expenses such as homeowners’ insurance, property taxes, utility bills and general maintenance," Williams said. "So, a $500,000 home can have anywhere from $10,000 to $20,000 of annual expenses. And what we don’t want to do in this situation is become house poor."
The next opportunity people have to nab a massive lottery grand prize is Saturday, when Powerball next draws for its $935 million jackpot.