Lifejacket parents: Homebuyers under 30 getting help from family on down payment
Oct 23, 2023, 10:00 PM
(Credit: Michael Reynolds/EPA-EFE/Shutterstock)
SALT LAKE CITY — A survey showed that 38% of homebuyers under 30 used money from their family to afford a down payment.
That’s according to a Redfin-commissioned survey conducted in Spring 2023 of recent homebuyers. The survey showed young homebuyers used cash from a family member or an inheritance as their down payment.
On a recent episode of Dave and Dujanovic, Dave says there’s a big temptation for parents to relieve that burden for their children. However, it could mean sacrificing retirement savings.
“I remember reading an article in Fortune magazine that says parents are sacrificing retirement savings to help their Gen Z or millennial kids, set them up for success,” Dave said.
He goes on to say that this creates a vicious cycle. If parents don’t have enough money for retirement, you may end up going to your children for help.
“And what do you do? Do you ask them for a refund,” said Dave.
Would you help your children with a down payment?
Debbie Dujanovic says she’s a lifejacket parent, meaning she plans on helping her children with a down payment. Contrary, Dave is a sink-or-swim parent and says he loves the lessons it teaches his kids.
“You’ve got to be self-sufficient. 100% self-sufficient. Anything that I can give you is a gift,” he said. “For the first 18 years of your life, I fed you, I housed you, I put you in, you know, every opportunity. Piano lessons, baseball games, everything I could do. And at that point, now it’s on you.”
A survey from Bankrate suggests Gen Z is not attaching home ownership to the American dream.
In the survey, 63% of Gen Z respondents associate owning a home with the American dream. Overall, 73% of those surveyed associate owning a home with the American dream.
“What that says to me is that our kids are not attached. And they’re not attaching their home ownership to the American dream, they’re much more willing to rent,” Debbie said.
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