Homeowner Parents More Likely to Help Adult Children Become Homeowners, Experts Say

Homeowner parents increasingly assist adult children in buying homes, highlighting intergenerational wealth transfer and housing affordability challenges.

Rafia Tasleem
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Homeowner Parents More Likely to Help Adult Children Become Homeowners, Experts Say

Homeowner Parents More Likely to Help Adult Children Become Homeowners, Experts Say

According to housing experts Susan M. Wachter and Dowell Myers, homeowner parents are more likely to assist their adult children in becoming homeowners through various means, such as providing down payment assistance, offering multigenerational living arrangements, and sharing firsthand knowledge of the homebuying process.

The National Association of Realtors' reports on home buyer and seller generational trends, new wealth gains underscore the critical role of the housing sector in the economy, as well as the social and financial benefits of homeownership. First-time home buyers, particularly younger millennials, encounter challenges such as limited funds for a down payment and increased anxiety during the homebuying process compared to repeat buyers.

Baby boomers, representing the largest generation of home buyers and sellers, frequently relocate to be closer to family or downsize their living space. Generation X buyers, despite being the highest-earning and most racially and ethnically diverse group, still face significant obstacles to homeownership and wealth accumulation, especially among lower-income and minority households.

Why this matters: The trend of homeowner parents providing financial support and guidance to their adult children in the homebuying process highlights the intergenerational transfer of wealth and the importance of family support in achieving homeownership. This trend has broader implications for housing affordability, wealth inequality, and the long-term financial well-being of both parents and their adult children.

A survey conducted by the Homeowners Alliance revealed that 50% of homeowning parents with adult children who are not homeowners wish they could offer more financial support. Furthermore, 56% of these parents anticipate that assisting their children in purchasing a home will impact their own financial situation, potentially requiring them to work longer, use their savings, or forgo funding their own long-term care. Experts predict that the practice of providing a 'pre-inheritance' to help adult children with homeownership is likely to increase, emphasizing the need for more open and less taboo conversations about this topic.

Key Takeaways

  • Homeowner parents more likely to assist adult children in homebuying
  • First-time home buyers, especially millennials, face challenges like down payment
  • Boomers frequently relocate, Gen X faces obstacles to homeownership and wealth
  • 50% of homeowner parents wish they could offer more financial support to kids
  • Providing 'pre-inheritance' to help kids buy homes may increase, need open discussion