In A Pricy Housing Market, Parents Are Helping Their Children Buy a Home

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In a housing market marked by high mortgage rates and a lack of affordability, some first-time homebuyers are turning to mom and dad for help.

While the housing market has improved recently, homebuyers, especially first-time buyers, may still need additional assistance. Mortgage rates are currently hovering around 6.5% or higher, and home prices are high but no longer rising as quickly as they were in the past, economists say.1

"It has probably always [been] the case that the younger generation has gotten help from the older generation, whether it's down payment assistance or paying for a house," said Chen Zhao, head of economics research at Redfin. "In today's market, it's probably happening a lot more by necessity: home prices and mortgage rates are high, so affordability is challenging."

For young homebuyers, receiving financial assistance from family members, in the form of a loan or help with a down payment, can ease the financial burden of buying a home in today's housing market, where homes remain expensive, and rates are high.

Lindsey Neuren—a real estate agent at Compass who's based in Austin—says she's noticed more parents lending to their adult children, with parents buying homes outright and then turning around and charging their kids interest, often at a lower rate.

"[This arrangement] sort of benefits the parents and the kids," said Neuren. "They [children] see it as a better option—instead of paying interest to a bank, they're just paying interest to their parents."

Neuren also sees parents helping their kids pay for the down payment.

According to a 2025 Redfin survey of 2,000 homebuyers, more than one in five Gen Z and Millennial homebuyers reported using cash gifts from family members to fund their down payments.2

Although Neuren still sees adult children receiving financial assistance when it comes to homebuying, she says the number of people she notices receiving help has declined since the COVID-19 pandemic—when home sales surged and the market was more competitive.

"As housing affordability improves, you expect fewer gifts [and] fewer buyers having to rely on family and friends for help with the down payment," said Orphe Divounguy, an economist at Zillow.