--- title: To Afford a Down Payment, Young Homebuyers Often Need 'a Pot of Family Money' description: High mortgage rates and home prices are increasingly leading Gen Z and millennial homebuyers to ask family for help with down payments. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2024-03-28T14:04:14.000Z' modified: '2024-03-28T14:04:14.000Z' section: Housing word_count: 536 canonical: https://money.com/family-money-down-payment/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo-illustration of a house-shaped key floating in a sky with coins raining down in the background.](https://img.money.com/2024/03/News-Young-Adults-Down-Payment.jpg) With [current mortgage rates](https://money.com/current-mortgage-rates/) flirting with 7% and typical home prices stuck well above $400,000, how are young adults able to buy a home? A [report](https://www.redfin.com/news/gen-z-millennial-down-payment-family-help/) released Wednesday by the real estate brokerage Redfin sheds some light. To [afford down payments](https://money.com/5-ways-to-afford-down-payment/), Gen Z and millennial homebuyers are taking on second jobs, emptying their savings accounts and, notably, relying on the bank of Mom and Dad. “Young Americans are increasingly turning to family to help fund down payments largely because it’s so expensive to purchase a home,” wrote Redfin’s Dana Anderson in the report. According to the firm’s survey, 36% of young homebuyers — a group that includes adults under age 43 — are counting on cash gifts from family to help them afford home down payments. This number has doubled since before the pandemic, when Redfin asked the same question to millennials in 2019. At that point, only 18% said they were going to use cash from family. ## Why it’s getting harder for young Americans to afford down payments Part of what’s fueling the trend of tapping one's parents for [down payment assistance](https://money.com/down-payment-assistance-programs/) is rapid home price growth. Home prices have skyrocketed nearly 40% from pre-pandemic levels, Anderson noted. Besides getting help from Mom and Dad to fund a down payment, 60% of young adults are saving up their own money, 39% are working second jobs and 22% are [raiding their retirement accounts](https://money.com/retirement-savings-mortgage-down-payment/). In addition to requiring multiple sources of funding, young homebuyers are making much smaller down payments than older generations. According to separate research from the National Association of Realtors (NAR), the median down payment for 24- to 32-year-olds was 8% in 2023 — far from the golden rule of 20%, which is typically the threshold needed to avoid having to pay for [private mortgage insurance](https://money.com/millennial-home-owner-pmi/). Meanwhile, the report said, those aged 58 and older put down *at least* 20% — and the oldest homebuyers, up to 27%. NAR's report also found that homebuyers age 58 and up were far more likely to say they "did not need to make any sacrifices" to purchase a home. The discrepancy is largely because these older homebuyers were able to at least partially fund their purchase by selling their existing home. (Among homebuyers of all ages, the typical down payment in 2023 was 14%, NAR found. Assuming the median home price of $417,700, that down payment translates to nearly $60,000.) According to Redfin, all of this points to one crucial fact: “Housing is simply too expensive.” As Redfin Chief Economist Daryl Fairweather underscored in the report, this ends up creating a dichotomy between young adults who have “a pot of family money to dip into” and those who don’t. As a result, many young Americans without family money are essentially shut out of homeownership, ultimately contributing to wealth inequality. “The American dream is just as much about class mobility as it is the home with a white-picket fence,” Fairweather said. “The housing affordability crisis has made both elements of the dream harder to attain.” ![](https://s3.consumersadvocate.org/prd/image/image/26681/medium_57f09f10-efb8-487d-a73e-5f7d605144eb.png) With some help from Rocket Mortgage (NMLS #3030), you can buy a new home! [View Rates](https://money.com/pr/q14b78f7c49e?ap_referrer=%2Ffamily-money-down-payment%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/family-money-down-payment/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Housing", "item": "https://money.com/housing/" }, { "@type": "ListItem", "position": 3, "name": "Home Buying", "item": "https://money.com/home-buying/" }, { "@type": "ListItem", "position": 4, "name": "To Afford a Down Payment, Young Homebuyers Often Need 'a Pot of Family Money'" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/family-money-down-payment/#webpage", "url": "https://money.com/family-money-down-payment/", "name": "To Afford a Down Payment, Young Homebuyers Often Need 'a Pot of Family Money'", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-03-28T14:04:14.000Z", "mainEntity": { "@id": "https://money.com/family-money-down-payment/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/family-money-down-payment/#breadcrumb" }, "dateModified": "2024-03-28T14:04:14.000Z" }, { "@type": "Article", "headline": "To Afford a Down Payment, Young Homebuyers Often Need 'a Pot of Family Money'", "articleSection": "Housing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/03/News-Young-Adults-Down-Payment.jpg", "width": 2880, "height": 1920, "caption": "News-Young-Adults-Down-Payment" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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