Nepo-Homebuyers: Aside from Paychecks, Family Money Is the Most Common Source of Young People’s Down Payments

Redfin reports that nearly one-quarter of Gen Zers and Millennials who recently bought a home used either a cash gift from family or an inheritance to help fund their down payment, according to a survey

SEATTLE--(BUSINESS WIRE)--Nearly one-quarter (23.8%) of young Americans who recently bought a home used family money to help fund their down payment. That’s according to a new survey commissioned by Redfin, the real estate brokerage powered by Rocket.

For Redfin’s report, “family money” refers to either a cash gift from family or an inheritance. Roughly one in five (20.7%) young Americans—Gen Zers or millennials—who recently bought a home used a cash gift from family to help with their down payment, and roughly 11% used an inheritance.

There are also other ways Gen Zers and millennials get help from family: About 18% report they lived with family or friends to save money for their down payment.

More than half (56.5%) of recent Gen Z and millennial buyers saved directly from paychecks to make their down payment, making it the only method young homebuyers cited more often than cash gifts from family.

21% of Gen Z/Millennial Homebuyers Used a Cash Gift From Family to Help Fund Down Payment How did you accumulate the money you need for a down payment? (Select all that apply)
	All	GenZ/Millennial	Gen X	Baby boomer
Saved directly from paychecks	54.0%	56.5%	55.8%	51.4%
Worked a second job	11.2%	17.6%	12.1%	5.1%
Cash gift from family	13.4%	20.7%	13.8%	7.1%
Sold stock investments	13.2%	20.4%	10.8%	8.8%
Pulled money out of retirement funds early	9.4%	12.3%	11.1%	6.1%
Inheritance	10.3%	10.8%	11.7%	8.7%
Contributed less to retirement savings	6.4%	10.5%	6.9%	2.4%
Sold cryptocurrency investments	5.4%	12.7%	3.5%	0.5%
Sold another home	27.0%	15.8%	25.0%	36.0%
Used equity from another home I still own	9.5%	12.6%	8.9%	7.8%
Lived with parents/family/friends to save money	9.3%	18.1%	7.9%	3.2%
I received assistance from the government	4.5%	7.9%	4.8%	1.2%
I received assistance from a non-profit association	5.5%	11.2%	5.2%	0.9%

More than one in 10 (12.7%) young recent buyers used cryptocurrency to help fund their down payment, and 20.4% sold stock investments. Retirement funds also contributed to down payments: 12.3% of Gen Z and millennial buyers pulled money out of retirement accounts early, and 10.5% contributed less to retirement.

Redfin asked survey respondents how they accumulated funds for their down payment because for many Americans, it’s difficult to afford to buy a home. The median U.S. home-sale price, and the median monthly mortgage payment, are both near record highs. And while wages are rising, they aren’t rising as quickly as housing costs.

Zooming in on down payments, the typical U.S. homebuyer’s down payment was roughly $63,000 as of 2024, up 7.5% from a year earlier. That’s equal to 16.3% of the typical home-purchase price.

“When rents are high like they are in the Chicago area, it’s often a good idea to buy to lock in a consistent monthly payment and get into the housing market,” said Dan Close, a Redfin Premier agent in Chicago. “But because the cost of buying a home is also high, it can be challenging for young people to afford both a down payment and monthly mortgage payments. Young people who have support from parents or other family members—whether that’s a place to live while they save up for buying a home or financial help—have a leg up. For some people, family help is the only way they can save for a down payment and start building equity for the future.”

18% of Young Renters Aren’t Buying Because They Can’t Afford a Down Payment, 25% Because They Can’t Afford a Home in Their Area

For young renters who aren’t planning to buy a home anytime soon, inability to save for a down payment is one reason. Nearly one in five (18.2%) Gen Z and millennial renters said one reason is that they’re unable to save for a down payment.

The most common reasons young renters aren’t buying homes are all related to lack of affordability. One-quarter (24.7%) of young renters aren’t buying because they can’t afford a home in the area where they want to live, making it the most commonly cited reason. Nearly one-quarter (23.4%) say they’re not buying because they’re financially unprepared for the surprise costs of homeownership, and one in five (19.9%) say mortgage rates are too high.

To view the full report, please visit:

https://www.redfin.com/news/young-homebuyers-family-money-down-payment

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.