Young people are buying homes, but often, they're getting help.
"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," said a Redfin-commissioned survey this summer.
The study revealed that about 20% of young buyers received a cash down payment gift and the remaining "nepo-homebuyers" as the study calls them, received inheritance funds.
Why Young Homebuyers Genuinely Need Help
Why do young Americans now need more help with home buying than previous generations? It's not the avocado toast or lack of ambition, or the other accusations older people sometimes throw at them.
"A perfect storm of factors is making it especially difficult for prospective homeowners in the millennial and Gen Z age groups to buy using entirely their own means," says an Aug. 20 article in The New York Times.
When the Times spoke to a senior figure in the mortgage industry, he talked of a trifecta: " ... high rates, high prices and rising insurance costs ... just make it really hard for somebody when they’re starting out. And this is all exacerbated by lower inventory levels."
Two elements of the trifecta have recently eased a little. But "little" is the operative word here.
Mortgage rates have nudged down, and prices aren't rising quite as rapidly as they once were. But homeowners' insurance premiums continue to climb sharply.
Homeownership Costs Remain Elevated
Take mortgage rates as an example. According to Freddie Mac, a 30-year fixed-rate mortgage (FRM) rate stood at 6.56% last week. That's lower than the 7.04% 2025 peak seen in January, but it's a lot higher than the 6.08% that was current less than a year ago.
Meanwhile, Gen Zers and millennials are old enough to remember how things were less than five years ago. The weekly average for a 30-year FRM hit an all-time low of 2.65% on Jan 6, 2021, says Freddie.
The median sales price of sold homes fell to $410,800 in the second quarter of 2025, says the Federal Reserve Bank of St. Louis. Again, that's lower than the all-time high of $442,600 reached in the fourth quarter of 2022. However, that figure was $317,100, five years ago (Q2/2020).
Overall, homeownership costs have risen sharply since the pandemic, with only limited relief arriving recently.
Some first-time buyers are now entering the housing market, but many need substantial help.
GenZ/Millennial Homebuyers Show Grit
The Redfin study shows that young homebuyers who receive family funds may be combining them with other sources that require grit to accumulate:
- Saved directly from paychecks: 56.5%
- Worked a second job: 17.6%
- Sold stock investments: 20.4%
- Lived with parents: 18.1%
And one advantage that younger buyers have that their parents didn't: cryptocurrency. The study showed nearly 13% of buyers sold crypto to buy a home.
How to Receive a Down Payment From Family
The Times interviewed a young woman who'd bought a $1.1 million condo in Brooklyn for cash. As a public school teacher, she needed all the help she could get. And her parents had lawyers draw up a tax-efficient family trust to pay for her home.
Of course, not many parents can afford a cool million to help out a child, no matter how loved he or she is. But some can chip in a gift toward the down payment and closing costs.
Any such gift must be documented in accordance with mortgage lenders' rules, which can get detailed, up to and including handing over the donor's bank statements.
Read Everything You Should Know About Down Payment Gift Rules to avoid any pitfalls.
Of course, many first-time buyers have no parents or have ones who are unable or unwilling to help. They should check out down payment assistance programs that cover their state, city, county or occupation. Start by reading 7 Places to Find Down Payment Assistance.
