The housing market is seeing a rise in "nepo-homebuyers," referring to young individuals from the millennial and Gen Z generations who are using cash gifts from their families to finance their home purchases. A survey conducted by real estate brokerage Redfin indicates that 36% of Gen Zers and millennials planning to buy a home expect to receive cash gifts from their families for their down payments. This percentage has doubled since 2019, highlighting a growing trend among younger homebuyers.
The increased reliance on family money for home purchases has created disparities in homeownership, with those without access to such financial assistance facing greater challenges in entering the housing market. Redfin's chief economist, Daryl Fairweather, notes that the soaring housing costs have led many young adults to turn to their families for financial support, particularly as home prices have risen nearly 40% since 2019.
Factors such as low housing inventory and high mortgage rates further complicate the housing market, prompting many prospective homebuyers to delay their purchases. In addition to cash gifts, some young Americans are also using inheritances or choosing to live with family members to ease their financial burden when buying a home.
Fairweather emphasizes that those without access to family financial support face significant disadvantages, exacerbating wealth inequality and hindering their ability to achieve economic mobility. The housing affordability crisis has made it increasingly challenging for individuals from less privileged backgrounds to attain the American Dream of homeownership and upward social mobility.
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