Data released by Redfin on Wednesday showed that 36% of Gen Z and Millennials who plan to buy a home in the near future plan to use cash gifts from family members for a down payment.
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Celebrity Nebo babies have been circulating the internet for more than a year, but homebuyer babies are also gaining momentum, according to a report. redfin tuna.
Among Gen Z and Millennials who plan to buy a home in the near future, 36% plan to use cash gifts from family members to finance a down payment. This number comes from a Qualtrics survey of 3,000 U.S. homeowners and renters conducted in February 2024.
Mr Redfern said just five years ago, young homebuyers were only half as likely to use household funds for a down payment. In 2019, 18% of Millennials used household cash for a down payment, and by 2023, this proportion will only increase to 23%. (Gen Z was not surveyed during those years.)
Cash isn’t the only help younger generations of homebuyers expect from family, however—about 16% of Gen Z and Millennials say they plan to use an inheritance to help with a down payment, and 13% plan to live with family members Parents or other family members to save money.
Provided by Redfern
Saving from one or two jobs is the most common way young homebuyers prepare to save for a down payment, with 60% saying they plan to save from their paycheck and 39% saying they will save from a second job money.
Housing affordability challenges have a greater impact on today’s younger generation than in the past, with U.S. home prices rising by nearly 40% compared with before the epidemic, and soaring by 7% last year alone. Low inventory also contributes to high prices, which remains a challenge.
In addition to these factors, Gen Z and Millennials typically have more student loan debt than their parents did at the same age, and their income Salary is lower than parents, adjusted for inflation. As a result, young homebuyers without financial support from their families are at a disadvantage when purchasing a home.
“Nebo homebuyers have a growing advantage over first-generation homebuyers,” Daryl Fairweather, chief economist at Redfin, said in a statement.
“With housing costs soaring so much, many young people with family savings are getting help from their parents even if they are working and earning a very good income,” she continued. “The bigger problem is that young Americans without family capital are often excluded from homeownership. Many of them also have good incomes, but they can’t afford a home because they are at a generational disadvantage; they don’t have a Large family fortunes are available. This exacerbates wealth inequality and often prevents young people from economically surpassing their peers from privileged backgrounds. The American Dream is as much about class mobility as it is about homes with white picket fences, and there is a housing affordability crisis Making those two dream elements harder to achieve.”
Affordability is the biggest barrier for young Americans who are unlikely to buy a home anytime soon, Redfin’s survey shows.
A majority of Gen Z and Millennials (43%) say they are unlikely to buy a home anytime soon because homes on the market are too expensive. About a third said their difficulty saving enough for a down payment was a barrier to buying a home, while 29% each said their inability to pay their mortgage and high mortgage rates were barriers.
Provided by Redfern
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