What does it take to buy a house? Increasingly, Mom and Dad. –The Washington Post

The Washington Post

Home buyers are increasingly turning to family members, most often parents, for help buying a house in overpriced and undersupplied markets, reflecting a shift in the way many families finance homeownership.

The share of young home buyers relying on older mortgage co-signers is as high as it has been in at least 30 years, according to a Freddie Mac analysis of its hoe loans.

Meanwhile, the share of home buyers in their 20s, 30s and early 40s receiving financial help for a down payment is also rising, after declining for much of the past five years. Overall, 12 percent of home buyers relied on down payment help from friends and family as of April, up from 9 percent last year, according to survey data from the National Association of REALTORS®. The youngest buyers — ages 25 to 33 — were the most likely to receive familial help, with nearly 1 in 4 receiving cash gifts or loans toward their purchases.

As home buying becomes increasingly out of reach to first-timers, REALTORS® confirm that more parents are stepping in to help, sometimes taking out loans against their existing homes to fund their children’s. More parents are also getting involved in the homebuying process from the beginning, considering joint purchases less of a handout to their children and more of a long-term family investment, brokers said.

Read the full article