The Blubber

In the US, among young homebuyers under 35, 23% used a cash gift from family members and 21% used inheritance money for their down payment, per Redfin.

Around 38% of individuals below the age of 30 who are purchasing their first homes heavily relied on financial assistance from family members or inheritance to secure the down payment for their new home, highlighting the intergenerational financial support that younger homebuyers often require. This data comes from recent research mentioned by Redfin's chief economist, Daryl Fairweather.

Estimates derived from the Reverse Mortgage Market Index (RMMI), a collaborative initiative between the National Reverse Mortgage Lenders Association (NRMLA) and data analytics company RiskSpan, indicate that seniors aged 65 and above collectively hold over $11.6 trillion in home equity as of Q1 2023. This substantial housing wealth accessible to seniors provides additional context to the findings in the Redfin survey.

Fairweather emphasized that it's a rare occurrence for a young person to be able to afford a home without some form of assistance. In the Redfin survey, which investigated how recent homebuyers accumulated the funds for their down payments, 509 respondents were under the age of 30. Among these young homebuyers, 23% utilized cash gifts from family members, while 21% used inheritance money to fund their down payments.

Moreover, there is a direct connection between a parent's homeownership status and the likelihood of their child becoming a homeowner later in life, as indicated by additional research cited by Fairweather. Research conducted by economists at the University of Chicago revealed that children born to homeowner parents have significantly higher chances of becoming homeowners themselves in adulthood. Furthermore, a 2021 Redfin survey of around 1,500 homeowners found that 79% of current homeowners had a parent who owned a home, and 67% had a grandparent who owned a home.