More young buyers rely on down payment help

More young buyers are relying on outside help to buy a home, underscoring how affordability pressures are reshaping the path to homeownership and why conversations around down payment strategies, family contributions and assistance programs are becoming increasingly important.

A new report from LendingTree found 40% of homeowners received down payment help for their current home, up from 35% in 2023. Nearly 80% of Gen Z homeowners said they received down payment assistance, compared with 56% of millennials, 35% of Gen X homeowners and just 12% of baby boomers.

Family remains the biggest source of financial aid. Sixteen percent of homeowners said their parents contributed toward the purchase, while others relied on relatives, inheritances, seller concessions or down payment assistance programs. Nearly half of those who received help said the money came as a gift rather than a loan.

For many buyers, the financial help was essential. More than one-third of homeowners who received assistance said they would not have been able to buy their home when they did without it. Others said the extra funds helped them qualify for a mortgage, lower monthly payments or afford a larger down payment.

Key findings:

• Nearly half of the buyers who received help said the money came as a gift, not a loan.
• Only 23% of homeowners said they put down 20% or more when buying.
• Six percent used a formal down payment assistance program.
• Some buyers said financial assistance helped them lower their monthly mortgage payments.
• Confidence in achieving homeownership without family wealth was lower among younger Americans.

Source: LendingTree

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