The Surprising Way Family Ties Can Help You Buy a Home
When it comes to buying a home, having a family can be a significant advantage. A recent survey by real estate brokerage Redfin reveals that homeowners with children are more likely to receive financial assistance from their families for down payments and monthly mortgage payments.
A Helping Hand from Family
The survey found that 25% of recent homebuyers with children received a cash gift from their family to help with their down payment, compared to 12% of homebuyers without children. This trend continues when it comes to ongoing mortgage payments, with 17% of homeowners with kids receiving financial help from their family, compared to 8% of those without children.
Inheritance Money Also Plays a Role
In addition to gifts and financial support, 11% of homeowners with children have used inheritance money to cover their mortgage, compared to 7% without kids. This highlights the importance of family ties in helping to manage housing expenses.
Other Strategies for Managing Housing Costs
The survey also explored other common methods homeowners use to pay their mortgages. Homeowners with children were more likely to use nearly every method listed, including working a side hustle, withdrawing money early from retirement funds, and more.
The Challenges of Homeownership
U.S. housing costs have surged by over 40% since the pandemic began, making homeownership challenging for many, regardless of whether they have children. Half of homeowners with kids report struggling to afford their housing payments, and those without kids face similar challenges.
Why Families with Children May Receive More Financial Help
There are several reasons why families with children may be more likely to receive financial help from relatives. For example, larger, more expensive homes are often sought after by families with children, which can drive up costs. Additionally, grandparents may be motivated to assist in providing a safe and stable home for their grandchildren.
Multigenerational Homes on the Rise
Redfin agents report an increase in multigenerational households as housing costs climb. Financial support often flows in both directions, with older parents helping their adult children purchase homes or adult children assisting their aging parents.
Alternative Ways to Invest in Real Estate
Real estate can be a great way to diversify your portfolio and earn high returns, but it can also be a big hassle. Luckily, there are other ways to tap into the power of real estate without owning property. For example, Arrived Home’s Private Credit Fund has historically paid an annualized dividend yield of 8.1%, providing access to a pool of short-term loans backed by residential real estate with a minimum investment of only $100.
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