Parents helping Gen Z become homeowners through generational wealth

(NewsNation) — Owning a home in America has started to become a less difficult path, thanks to parents helping Gen Z through accumulated housing wealth.

A study from Realtor.com found housing wealth has continued to grow rapidly in many parts of the country, particularly for households that were able to buy over the past six-plus years. The analysis used data from the Panel Study of Income Dynamics through 2021.

This positive trend comes at a time when many people in the U.S. are facing affordability challenges.

“Households that inherit property or receive financial assistance from family are more likely to become homeowners themselves and, in turn, are more likely to leave assets to their children,” the real estate listing site said.

“Consistent with this pattern, homeowners are 1.3 times more likely than renters to anticipate leaving assets to the next generation, underscoring the central role housing plays in the intergenerational transfer of wealth,” it added.

The study also revealed that one in five first-time homebuyers don’t inherit property.

However, parents help them with a down payment by extracting equity from their own homes to finance their children’s purchases. That helps children become three times more likely to buy a home than those whose parents do not.

Analysis from the Federal Reserve acknowledges parental transfers explain nearly 27 percent of homeownership rates among young households.

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