For many Gen Z and millennial homebuyers, owning a home remains a cornerstone of the American Dream, but one that’s increasingly out of reach without financial help from family. With rising home prices, stagnant wages, and crushing student loan debt, a growing number of young buyers are turning to relatives, especially parents and grandparents, for help with one of the biggest hurdles in homeownership: the down payment.
This article explores how and why younger generations are relying on family support to buy homes, what the data reveals, and the implications for real estate trends, wealth equity, and family dynamics.
The Down Payment Dilemma
For most first-time buyers, the biggest financial challenge isn’t the monthly mortgage, it’s saving enough for the down payment. Traditionally, a 20% down payment was the gold standard, but even with options requiring only 3% to 5%, many young adults find it nearly impossible to accumulate the necessary funds.
Consider this: the median price of a home in the U.S. is over $420,000. That means even a 10% down payment equals $42,000, not including closing costs, moving expenses, or emergency savings. For millennials and Gen Zers who entered the workforce during the Great Recession, the COVID-19 pandemic, or amid record inflation, that’s a tall order.
Family to the Rescue
According to a recent National Association of Realtors (NAR) survey, more than 30% of first-time buyers under age 35 received financial help from family or friends, with the bulk of that help going toward the down payment. Other studies suggest that among Gen Z homebuyers (those born after 1996), the percentage relying on family help is even higher, with some estimates putting it closer to 40–50%.
This trend is not limited to wealthy families. Middle-class parents are dipping into retirement savings, refinancing their own homes, or co-signing loans to help adult children take their first steps into homeownership. In many cases, the help isn’t just a gift; it’s a lifeline.
Why It’s Happening: The Generational Wealth Gap
There’s a growing generational divide in wealth accumulation. Baby boomers and Gen Xers, who bought homes before or during the early 2000s, benefited from decades of property appreciation. Millennials and Gen Zers, by contrast, came of age during a time of economic instability and skyrocketing housing costs.
The Federal Reserve reports that boomers hold over 50% of U.S. wealth, while millennials hold less than 10%. With housing prices doubling or tripling in many markets over the last 20 years, young buyers often can’t compete without intergenerational transfers of wealth.
How Family Assistance is Structured
Family help comes in various forms:
-
Gifts: The most common is an outright cash gift, which lenders typically allow, though it must be documented and may be subject to IRS gift tax limits.
-
Loans: Some families opt to lend money privately, setting repayment terms themselves. This can help buyers avoid high-interest loans but requires clear legal documentation.
-
Co-ownership: Parents may choose to co-buy a home with their child, sharing ownership until the younger buyer can refinance.
-
Inheritance acceleration: Some older adults are choosing to “give with a warm hand” by gifting down payment money now, rather than leaving it through inheritance later.
Each option has financial and emotional pros and cons, which families must navigate carefully.
The Emotional Dynamics
Asking family for help can be emotionally complicated. For some young adults, it’s a source of guilt or anxiety, especially for those raised with a strong value of independence. For parents, the decision to help can trigger worries about retirement security or fairness among siblings.
Despite these challenges, many families frame it as a practical investment: by helping a child build equity sooner, they’re enabling long-term financial stability. In high-cost areas, family assistance is often the only way young buyers can stay close to home.
Cultural and Community Influences
In some cultures, multigenerational financial support is expected. Asian, Middle Eastern, and Hispanic families, for example, often pool resources for home purchases. Among these communities, it’s common to live together or support relatives with down payments as part of a family-first mindset.
In other cases, the decision is purely economic. In cities like San Francisco, New York, or Seattle, where even starter homes cost $700,000 or more, family help is not just common, it’s nearly essential.
What It Means for the Housing Market
This trend has ripple effects across the housing landscape:
-
Homeownership gap: Young adults without access to family wealth are more likely to rent longer, potentially widening the homeownership and wealth gaps between demographic groups.
-
Regional migration: Some millennials and Gen Zers are moving to lower-cost states like Texas, Florida, or Tennessee where down payments are more manageable without help.
-
Rising prices: In high-demand markets, family-funded buyers can bid more aggressively, sometimes contributing to bidding wars and driving up prices further.
-
Policy debate: The reliance on family wealth is prompting calls for policy changes, such as down payment assistance programs, student loan relief, or first-time homebuyer tax credits.
The Future: Can the Trend Continue?
As home prices and interest rates remain high, family assistance is likely to continue for the foreseeable future. But it may not be sustainable forever. Not all families have the means to help, and the more parents tap into their own savings or retirement funds, the more financial strain they may feel later in life.
The next evolution may involve more creative solutions: rent-to-own programs, employer-sponsored housing benefits, or new forms of co-buying platforms that help young buyers without traditional wealth.
What Buyers and Families Should Know
If you’re a Gen Z or millennial considering asking family for help, or a relative thinking of offering support, keep the following in mind:
-
Communicate clearly: Set expectations about whether the help is a gift, a loan, or an investment.
-
Get everything in writing: Even among family, it’s wise to document terms and protect all parties legally.
-
Understand the tax implications: Gifts over $18,000 per year (in 2025) may require IRS reporting.
-
Work with a lender early: Lenders need to verify and approve all sources of down payment funds, so be transparent from the start.
-
Talk about long-term financial health: A down payment gift can help now, but make sure the monthly mortgage, taxes, and insurance are sustainable.
Conclusion
The dream of owning a home is still alive for Gen Z and millennials, but increasingly, it’s one that depends on family help. With housing costs rising faster than incomes and economic challenges continuing to shape the lives of young adults, asking relatives for down payment assistance is becoming not just common, but necessary.
While this trend reflects a positive aspect of familial support and generational wealth sharing, it also highlights deeper systemic issues, like income inequality, housing affordability, and unequal access to financial resources. As more young people turn to the Bank of Mom and Dad, the real estate industry, policymakers, and society at large will need to ask a bigger question: how can we ensure that the path to homeownership is fair and accessible to everyone, not just those with family money?
