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First-Time Buyers: With a Little Help From Their Friends

Research from the National Association of Realtors (NAR) found that one-third of all first-time buyers used help from family and friends to purchase a home over the past year. 

Additionally, 78% of first-time buyers used savings to buy their home. 

“Using family as a source of downpayment help is most common among younger millennial buyers (ages 20 to 28) compared to other generations, and is more common among unmarried couples,” the report states. “Both sets of buyers have lower household incomes so may be less likely to scrape together the funds individually.”

Families are helping younger buyers save up for their first home by allowing them to live at home. Approximately one-quarter of first-time buyers moved directly from their parents or friends’ home into homeownership.  

The NAR states this has increased from 12% in 1993 to the current rate of 23%. Those renting before buying a home drop from 82% to 71% during that same period.  

Thirty-percent of millennials moved directly from a family members’ home into homeownership. This arrangement is more common among single males and unmarried couples. 

The Washington Post, however, issued a report earlier in January, using data from the Federal Reserve, that found in 2019, millennials with an average age of 31 owned just 4% of real estate value across the nation. 

The Post adds that many millennials are entering their prime home-buying years and are likely to make up some of the gaps by the time they are 35—but does not expect the generation to reach 30% of the housing market. 

Finances continue to be a struggle for the millennial generation. The Post states that for households headed by someone under the age of 35, median debt grew from $21,000 in 1989 to $39,000 in 2016. During that same period, the share of under-35 households with student loan debt more than doubled from 17% to 45%, and their median debt more than tripled—$5,600 to $18,000. 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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