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.
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.
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.
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 home buyers 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.
"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."
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."
