Nepo-Homebuyers: More Than One-Third of Gen Z and Millennial Homebuyers Plan to Use Family Money For Down Payment
Young Americans who have the means are turning to family for help with down payments as housing costs soar.
Young homebuyers are also receiving help from family members in other ways. Roughly one in six (
Working to earn money is the most common way for young buyers to fund down payments:
That’s based on a Redfin-commissioned survey conducted by Qualtrics in February 2024. The nationally representative survey was fielded to roughly 3,000
Young homebuyers are twice as likely to use family money for down payment than they were 5 years ago
Just
Young Americans are increasingly turning to family to help fund down payments largely because it’s increasingly expensive to purchase a home.
In many ways, Gen Zers and millennials face a more difficult financial landscape than their parents did at the same age: Their wages are lower than their parents’ wages were, they have more student loan debt, and inflation has pushed up the cost of nearly everything, including housing.
The fact that so many young Americans rely on help from family to afford a down payment is emblematic of the fact that housing is simply too expensive. A recent Redfin analysis found that starter homes are getting much more difficult to afford, pricing many Americans out of the starter-home market altogether. People without financial help from family are at a major disadvantage when it comes to purchasing a home.
“Nepo-homebuyers have a growing advantage over first-generation homebuyers. Because housing costs have soared so much, many young adults with family money get help from Mom and Dad even when they have jobs and earn a perfectly respectable income,” said Redfin Chief Economist Daryl Fairweather. “The bigger problem is that young Americans who don’t have family money are often shut out of homeownership. Many of them earn a perfectly good income, too, but they aren’t able to afford a home because they’re at a generational disadvantage; they don’t have a pot of family money to dip into. This contributes to wealth inequality and often prevents young people from gaining economic ground on their peers who come from more privileged backgrounds. The American Dream is just as much about class mobility as it is the home with a white-picket fence, and the housing affordability crisis has made both elements of the dream harder to attain.”
Survey results show that lack of affordability is biggest barrier to homeownership for young Americans
Among the young Americans who aren’t likely to buy a home in the near future, lack of affordability is the biggest barrier.
Nearly half (
Of the Gen Zers and millennials who aren’t planning to buy a home in the near future,
More than one in 10 (
To view the full report, including charts and survey methodology, please visit:
https://www.redfin.com/news/gen-z-millennial-down-payment-family-help
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Source: Redfin