Due to the growing student debt problem, first-time borrowers are finding it more difficult to afford owning a home. However, according to an article in Bloomberg, while it might be difficult to secure a loan though the bank, a second, closer option is starting to step in and help finance their first home: mom and dad.
Last year, 27% of those purchasing a home for the first time received a cash gift from relatives or friends to come up with a down payment, according to data from the National Association of Realtors. That’s up from 24% in 2012 and matches the highest share since the group began keeping records in 2009.
“Without them, the recovery’s not sustainable,” said Anika Khan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. Anything that gets more money into first-time buyers’ hands “just moves the housing recovery along,” she said.