Prospective homeowners are relying on their parents to help co-sign loans and even pay down payments as adults struggle to buy their first home, per a recent report.
"The housing market is an incredibly unaffordable place right now," chief economist at Redfin, Daryl Fairweather, told The Washington Post. "People who are succeeding are coming in with a lot of cash and large down payments — and often, family support."
"I always wanted to buy a home, and I really didn’t want to have my parents’ help," Eve Brown, a Cincinnati resident, told the outlet. "But it got to the point where it was just obviously better to buy — and no way I could do it on my own."
LIVING CLOSE TO MOM IS A MAJOR CONSIDERATION FOR AMERICANS BUYING A HOME
High interest rates and limited housing supply have made it a tough market for buyers to find a house that meets their needs, but homeownership remains a top priority for 42% of Americans who don't currently own a home, according to a survey by Credit Karma.
As a result, some aging parents believe that they have no choice but to help their children try to achieve homeownership.
"As a mother, I want to do all I can to give my children a better future," mother Lizet Rodriguez said of helping her son buy a home. "We are first-generation immigrants in this country, and we have to stick together and help each other if we want to get ahead."
"These days it almost feels like, ‘Duh, I have to use my parents’ money, there’s no other option,’" real estate agent Kristina Modares said. "It’s definitely harder for younger people to buy right now, and the boomer generation has a lot more money than Millennials or Gen Z has."
YOUNGER GENERATIONS OPEN TO TURNING TO FRIENDS, FAMILY TO ACHIEVE HOMEOWNERSHIP
Hayden Smith, who bought a condo with the help of his parents, argued that the possibility of the housing market worsening made the decision easier.
"Part of me wanted to say, ‘No, I don’t want to take it,’" Smith said. "But I don’t see things getting easier or better or more attainable in the future. It sounds bad to say out loud, but I finally thought, ‘I may as well take what I can now, before the market gets even worse.’"
Another benefit of having family help when buying a home is that negotiating a loan deal with parents can mean fewer interest payments to the bank. Khang, a physician, said that he makes payments to both his parents and the bank every month.
"I was prepared to take out a 75 percent mortgage, but my folks were like, ‘Actually, why don’t you use this money and avoid the interest,’" Khang Nguyen said. "Obviously it’s a challenging market here in Southern California, but having access to capital from family at essentially no cost is really helpful."
"My husband and I never thought we could buy a house, especially with day care. It’s so wildly expensive and impossible to save any money," a new homeowner, Emily King, said. "The only reason we were able to afford this is because of the state it’s in — no AC, no dishwasher, with a septic tank and a well. And because of my mom."
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Fox Business' Eric Revell contributed to this report.
