From Inheritances to Gifts

More than one-third (36%) of Gen Zers and millennials planning to purchase a home soon expect to get a cash gift from family to help fund their down payment, according to a new survey from Redfin. Young homebuyers are also getting financial assistance from family members in different ways. Approximately one in every six (16%) Gen Zers and millennials say they will utilize an inheritance to help fund their down payment, while roughly 13% intend to live with their parents or other family members to save money for down payments. Working to earn money is the most frequent strategy for young buyers to fund down payments, as some 60% say they’ll save directly from their salaries, while 39% plan to work a second job.

“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.”

Source: Mortgage Point