Recent data reveals that homebuyers with children are significantly more reliant on family assistance for down payments and mortgage payments, driven by the necessity for larger, costlier homes.
A recent survey conducted in September 2024 among 1,802 U.S. residents by Ipsos, commissioned by Redfin, provides insights into the financial dynamics faced by homebuyers. The data reveals that one-quarter of buyers with children at home received financial gifts from family to assist with down payments. This is more than double the 12% of those without children who received such support.
Homeowners with children are also more likely to get help with mortgage payments. While 17% of these homeowners receive assistance from family, only 8% of those without children reported the same. Furthermore, 11% of parents have turned to inheritance money for mortgage payments, compared to 7% of non-parents. The propensity for family assistance is rooted in various factors, including the need for larger homes with features like proximity to good schools and more space, which tend to be more expensive.
Beyond family help, individuals with children often employ various financial strategies to manage housing costs. They are twice as likely to work additional jobs or dip into retirement savings compared to those without children. About 23% of parents have a side hustle, while 14% have withdrawn from retirement funds early. Such measures illustrate the heightened financial pressure on families with children.
The survey highlights a broader economic challenge: the rise in housing costs, which have surged over 40% since the pandemic’s onset. Approximately half of the homeowners, regardless of parental status, struggle with housing payments. However, families with children face unique challenges, often requiring larger homes due to lifestyle needs, which attract higher costs and often necessitate additional financial support.
It appears that the financial support systems among family members are evolving, particularly in today’s economic climate. Multi-generational homes are gaining traction, with older parents providing financial support to their adult children and vice versa. This trend is further supported by preferences among younger generations, predominantly Gen Z and millennials, who are more inclined to seek and receive assistance from their parents.
The survey underscores the evolving financial landscape for families, emphasizing the critical role of family support in securing housing, especially for those with children. As housing costs continue to rise, the need for financial assistance, whether through gifts or joint familial living arrangements, becomes increasingly vital for many American families.
Source: Redfin
