Down payments remain the biggest need
Rising housing costs are pushing more families to take on a direct role in helping younger buyers secure a home, with parents increasingly covering expenses that would typically fall on borrowers.
A survey released by Veterans United Home Loans found that 59% of parents have already provided or expect to provide financial support for their child’s home purchase. The trend is more pronounced among military households, where 68% of veterans and service members reported plans to assist compared with 49% of civilians.
"Today's affordability challenges are making it harder for many younger buyers to get a foothold in the housing market. For some families, that means stepping in where they can to help bridge gaps around upfront costs or qualification hurdles, even if it means stretching their own finances or making sacrifices elsewhere,” said Chris Birk, vice president of Mortgage Insight at Veterans United.
The ways in which families are providing assistance vary. About 43% of respondents said they are helping with down payments, while 37% are assisting their child in meeting mortgage requirements and 33% are covering closing costs. Beyond these initial expenses, some parents are also focused on longer-term outcomes, including helping their children build equity, lower monthly payments, or access better neighborhoods.
Others are stepping in through indirect means, such as allowing their children to live at home to save money or covering additional costs tied to moving, furnishing, or improving a property.
For most families, the money is not expected to be repaid. Among parents who have helped or plan to help, 57% said the support is a gift. Another 20% described it as a loan, while 23% said it is a mix of both.
The survey also found that parents are often making sizable commitments. Thirty percent said they have contributed or expect to contribute between $25,000 and $49,999. Another 23% said they plan to provide between $50,000 and $99,999, while 12% expect to contribute between $100,000 and $199,999.
To make that possible, many parents are drawing from existing savings and assets. About 65% said they are using checking or cash accounts, 50% are using investment accounts, 35% are leveraging home equity, 32% are drawing from retirement accounts, and 27% are relying on inheritance or trust funds.
In some cases, parents are also participating directly in the transaction. The survey found that 18% have co-signed or plan to co-sign a mortgage, while 17% have purchased or plan to purchase a home outright for their child. Another 17% said they have provided or expect to provide a private loan.
"At the end of the day, this is about families working together to navigate a challenging market. For parents who are in a position to help, it can be a powerful way to open the door to homeownership sooner and set up their children with a stronger financial foundation for the future,” Birk said.
