Nearly one in four young Americans who recently purchased a home relied on family money—either as a cash gift or inheritance—for their down payment, according to a survey commissioned by Redfin.

Why It Matters

The findings, published on Monday, highlight the growing role of family support for millennial and Generation Z homebuyers, as housing affordability worsens nationwide due to increased prices, historically high mortgage rates and less consumer confidence in the long-term economy.

The total number of unsold homes in the U.S. in June was up 20 percent compared with a year earlier, according to Realtor.com, while inventory was up by 28.9 percent year-over-year. In the same month, pending home sales were down 1.6 percent from June 2024.

Sellers have also had to wait a little longer, as homes last month spent a median of 53 days on the market before going under contract, five more days than a year ago.

What To Know

The Redfin-commissioned survey of 4,000 U.S. residents conducted by Ipsos in May found that 23.8 percent of recent Gen Z and millennial homebuyers had tapped family money for their down payment.

Of those, 20.7 percent reported using a cash gift from family, and about 11 percent had received an inheritance. About 18 percent said they were able to save for a down payment by living with family or friends, illustrating multiple forms of intergenerational support in the current market.

Chen Zhao, head of economics research at Redfin, told Newsweek via phone on Monday that the survey’s results mimic concerns of the past three or four years going back to the COVID pandemic. The younger aspiring buyers still face massive hurdles today.

“The ones who are successfully able to buy are relying on family support because most of us who are buying homes already own homes, and oftentimes you’re able to use the equity from your first house to fund the next house,” Zhao said. “But for a first-time home buyer, they’re at a disadvantage.”

The root of this is home prices increasing about 45 percent for two years before the pandemic, Zhao said, with prices not really falling while mortgage rates simultaneously doubled.

More than half—56.5 percent—of Gen Z and millennial homebuyers reported saving directly from their paychecks, making this the most common path to a down payment.

Other methods included selling stock investments (20.4 percent), working a second job (17.6 percent), selling cryptocurrency (12.7 percent) and receiving help from government or nonprofit organizations (less than 12 percent).

“A lot of them are still relying on their own savings, but a lot of the time your own savings isn’t enough unless if you’re making an extremely high salary in a lot of markets,” Zhao said. “And for the parents and their families who are investing in their kids, I think they recognize that there is this sort of need to do that if you want your kids to own a house.”

Historically, if you’re looking to buy a house and determining mortgage payments, broadly speaking, past homebuyers could afford a monthly payment of about 30 percent or less of a median family’s income, Zhao added.

“Affordability has just gotten completely out of whack,” she said. “So, now we are way above that affordability threshold. For parents of the younger generation who lived through this time period, they can see that happening. It’s only all that surprising that a lot of families are willing to help the younger generation.”

The survey results came as home prices and mortgage payments reached near record highs across the country.

The typical down payment rose to about $63,000 in 2024, a 7.5 percent increase from the previous year and equivalent to 16.3 percent of the median purchase price. Wage growth has failed to keep pace with escalating housing costs, making it increasingly challenging for younger Americans to afford a home on their own incomes.

What People Are Saying

Dan Close, Redfin Premier agent in Chicago, said in a statement: “People need to live somewhere, and living somewhere costs money. The problem right now: housing costs too much for a lot of people. Some of those people live with their parents, and some are lucky enough to get help from their parents for a down payment and/or their monthly housing payments. In cases where that’s an option, it’s not a bad time to buy and start building equity because it’s a buyer’s market and lots of sellers are giving concessions.”

What Happens Next

With affordability challenges and high down payments persisting, reliance on family assistance may continue defining how young Americans enter the housing market. The data suggests intergenerational wealth could shape homeownership rates and patterns among Gen Z and millennials if current trends hold.