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Here’s how millennials are funding home purchases

Parents do more than assisting with down payments

Student debt is one of the greatest barriers to millennials trying to jump into the housing market. But a study by loanDepot reveals that parents might be stepping up to save the day, and in more ways than the common option of letting their kids move back into the house.

It is not new news that millennials are loaded with student debt. With many reports, like this one, showing a growing number of millennials moving back in with their parents.

New research shows the number of parents who expect to help their Millennial-age children purchase a home in the future will increase by 31% compared to the past five years, from 13% to 17%.

"Support from parents is playing a significant role in the housing recovery, and this new research indicates the trend will increase," said Dave Norris, president and chief operations officer at loanDepot.

"First time home buyers comprise 28% of the today's home buying market, an almost all-time low. Through the survey, 75 % of Millennial-age home-buyers who received financial support from their parents said that assistance made it possible for them to buy a home. Without that financial support, it's likely the pool of Millennial first-time home buyers would be even smaller than today."

But they way the parents are planning on helping their children finance a home is changing.

Click to enlarge


Source: loanDepot

Click to enlarge


Source: loanDepot

In the future, parents are more likely to help their kids pay 'other expenses' or student loan debt and to welcome their boomerang children back to the nest than in the past.  

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