77% of Millennial and Gen Z Respondents Are Turning to Their Parents for Help Becoming First-Time Homebuyers, Delaying Retirement for Many Boomer Parents–But It Doesn’t Need to Be That Way
A national survey conducted by loanDepot found that 77% of Millennial and Gen Zers are expecting to receive financial assistance from their parents to purchase their first home. And, of the 1 in 4 surveyed who indicated that they were not interested in buying a home, 61% indicated that their interest in buying one would increase if their parents helped them.
Interestingly, parents are mostly aligned with these expectations, with 65% of parents aged 39 or older surveyed indicating that they were willing to help their children buy a home. However, the majority, 76%, had not, to date, assisted with financial support.
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That support may come at a steep price for parents, with 18% of respondents who indicated that they planned to help their children buy a home advising that their retirement was on hold. Additionally, 1 in 4 parents who indicated their children still live at home also said their life and retirement were on hold as a result.
Exactly how much financial assistance—and what kind of help—these potential first-time homebuyers expect varies. The most common expectations included help with a down payment (38%), co-signing the mortgage (31%) and helping with closing costs (24%). Of those expecting down payment assistance, the majority of respondents were looking for less than $10,000, while 19% anticipated $10,000 or more. This gap in financial expectations points to an opportunity to provide greater guidance to Millennials and Gen Zers about modern mortgage basics, including what it takes financially to enter today’s housing market.
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“I think that what this data points to is that the desire to own a home of your own has not changed over generations,” said John Bianchi, loanDepot’s EVP, National Production Manager. “But what has changed significantly are the array of loan options available today, both in loan types and down payment requirements. loanDepot, for example, offers multiple programs that do not require a deep cash outlay to get into a home, which can help Millennials get into their first home—and prevent their parents from digging into their savings or retirement funds.”
The survey also found that instead of taking a more traditional “starter home” path to home ownership, many Millennials are holding off entering the market with a goal of purchasing a “forever home” as their first home. In fact, 66% of respondents would prefer to hold off for a “forever home” than purchase a starter home sooner (35%).
“One persistent misconception is that a 20% down payment is needed to purchase a home, and that could be factoring into some of this purchase planning,” added Bianchi. “The truth is, there are many excellent ways that Millennials can get into a home. I’d recommend starting any search by consulting with an experienced mortgage loan officer for advice, ideally one with local knowledge of their area.”
LoanDepot is a mortgage industry leader dedicated to creating seamless borrower experiences through its proprietary mello™ technology and mello smartloan™, the industry’s first end-to-end fully digital mortgage.
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