"Nepo-homebuyers": 38% of young buyers use family money for down payments

Considering that the previous generation benefitted greatly because of low interest rates (esp. e.g. being able to buy a second home at the same monthly payment due to rate halfings), and those low rates drive up the cost of housing, having the previous generation finance this generations house kinda makes sense, even if its not "fair" for everybody.

Is that more than in the past?<p>The article doesn&#x27;t really say.<p>When I bought a home I had a family member help out while I was selling my previous home. This wasn&#x27;t difficult nor did it seem strange to anyone involved as far as the financing went.<p>I suspect a good chunk of purchases are this way in one form or another.

Not in the US but have the same issue where i am. And because prices don&#x27;t seem to affect supply, everyone getting money from parents is just pushing up the prices for each other. The government doesn&#x27;t do much about it because many of them own property or own multiple properties acting as landlords.. and older people with property still vote more.<p>The same older people complain their children or grandchildren can&#x27;t afford to live near them. But the moment someone tries to build more houses or apartments in the area they&#x27;ll be submitting objections to the local council because it will affect their property value.<p>The government did a &quot;help to buy&quot; scheme but that just made it all worse. Because the higher the price the more they paid (up to a certain limit). So you&#x27;d have people who can afford more getting paid more from the scheme.. and getting help from parents.<p>So if two of these people start bidding on a house they can both now afford to bid higher against each other. Pushing prices up at the expense of tax payers.<p>And then just to make all worse a huge number of properties being taken off the market to be used as Airbnb&#x27;s. Forcing the government to utilize hotels to house refugees and the homeless. Which is then creating a need to build more hotels and push up the prices of airbnbs..<p>We&#x27;re in some weird feedback loop.

I’m already thinking about this as our next big expense after college. It’s no secret wealthy parent often buy their kids houses or apartments next to the university if they can afford it as well that’s been happening for ages

My wife and I aren&#x27;t young (over 40), but we borrowed 35k for our 7% down at the bottom of the interest rates. We got way too much house, but got almost everything we wanted. As a married couple, if you stay under a ~40k gift, you can tell the IRS to write it off as 2 gifts (separate transfers for the balance of the difference &lt;5k) and pay no income tax on it.<p>Edit: Not a taxman. Just trying to remember what ours told us. Better info in the following post.

Seems like we’re recreating the Middle Ages financially a bit here doesn’t it?<p>Mobility is linked to previous generations more than your own. Wealth is more important than income because there are so few jobs that can actually build enough wealth to own a home.

38% doesn’t seem very high. I wonder what it was in the past? Parents have always helped their children it’s not like this is some new trend. Without any historical saga this article is pointless.

I hear about help getting down payments and people buying with &lt;20% down payments etc all the time.. but as a non-trustafarian, financially literate person with a normal non-tech job.. the down payment seems to be the easiest part. The monthly payment and interest expense is the hardest one (especially since it means committing to maintaining your career or better for the next 30 years, or otherwise hoping there isn&#x27;t a housing downturn). Can anyone explain the perspective I&#x27;m missing?

Something I am curious to see is the &quot;share of housing inventory owned by each age group&quot; over the years. For example, &quot;25% of housing is owned by people over 75 years old, 50% 55-75, 25% under 55&quot;, etc. broken down for each year.<p>Basically, I suspect that today a larger share of homes are owned by the older generations, making it more and more difficult over time for young families to find houses to buy. A crude way to phrase this would be that the older generations are hoarding all the housing supply. The older generations are increasing in numbers and financial means, and the housing supply is not increasing fast enough to give the younger generations the same opportunities to buy.<p>The end result of this seems to be a massive wealth shift to the older generations, leaving the current younger generations less well-off than their parents were at the same age. This seems to be the opposite of what you want to see in a well functioning society.

Like, of course? If I can afford it I am going to help my kids too. My parents helped me for the start too (tho not to buy house, they could not afford that).

&gt; Among those young homebuyers, 23% used a cash gift from family members and 21% used inheritance money for their down payment.<p>Be curious to know &quot;how much&quot; money was given. I think our family gave us $5K or so. I assume some people get much more and some get 0. My sister was given a 0 interest loan from my parents, maybe around $50K or so.

And in Canada another 30% (or less with overlap) of home purchases are by investors and not primary owners. Hooray!

Buying your home and car is tax advantaged. Because you pay for your house and car with post tax money the equivalent stock or bond investment would need to yield 25-30% more to be the same roi. That can be a big deal over time

And, is there anything wrong with this? Parents are supposed to help their children.

Meanwhile I&#x27;m here paying 1&#x2F;2 of my mom&#x27;s mortage to keep the family home. Of all the boomers why did I get stuck with bums? Smdh

there is no problem here, this is exactly what family is - people who will be there for you when no one else will<p>its a plus for the neighborhoods these people buy into as well - buyers from good supporting families are probably going to be good neighbors too<p>parents will be more flexible, sympathetic, and less greedy than a bank, and they can feel good about being there for their kids<p>everyone wins

Slow crawl to feudalism.