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Almost 40% of recent homebuyers under age 30 received assistance from a parent - these are sometimes referred to as Nepo-home buyers. This assistance could be in the form of a gift from a parent, or through inheritance. This is according to a study that was commissioned by Redfin.
Houston realtor Kenya Burrell Van Wormer gives three reasons behind the need for this assistance: Higher Interest rates, low housing inventories and uncertainty around the economy and the job market. These factors have made it difficult for some young / first-time home buyers to get the money they need to make a down payment for a house. That is where mom and dad sometimes step in.
Realtor Van Wormer says that home buyers aged 25-34 are only 14% of the market here in Texas, whereas buyers 55+ are 52% of the market. She believes that this disparity may be due to the fact that older home buyers have built up equity from previous home ownership to aid them in transacting.
President Biden has proposed making $10 billion available for a home down payment assistance program that would allow first-time homebuyers whose parents do not own a home to get government assistance. The White House has also proposed an additional $100 million down payment assistance pilot program to expand homeownership opportunities for first-generation and/or low wealth first-time homebuyers. A White House briefing room statement about new proposed actions on home ownership was issued just last week (October 16, 2023).
Previous government interventions into housing have focused on low-interest loans or other credit related initiatives and not as much on direct distributions for down payments.