Why Families With Kids Rely More on Financial Help to Buy Homes
Families with children are navigating a unique set of challenges in the U.S. housing market. According to a recent survey by Redfin, homebuyers with kids are significantly more likely to receive financial assistance from family members than their child-free counterparts. This financial support—often used for down payments and mortgages—reflects the rising costs of housing and the specific needs of families in today’s economy.
Key Findings from the Survey
A September 2024 survey conducted by Ipsos for Redfin revealed:
- 25% of homebuyers with kids received family gifts for down payments, compared to 12% of buyers without kids.
- 17% of homeowners with kids got help from family for mortgage payments, versus 8% of those without.
- 11% of families with kids used inheritance money for mortgages, compared to 7% without kids.
These statistics underscore the growing reliance on familial financial support among families purchasing homes in the U.S.
Why Families With Kids Need More Financial Help
1. Bigger Homes with More Amenities
Families with children typically require larger homes to accommodate their needs, which come with higher price tags.
- 68% of respondents with kids rated indoor space as a “must-have,” compared to 60% of those without kids.
- Families prioritize features like proximity to schools, work-from-home spaces, and safe neighborhoods, making affordability a secondary concern.
2. Rising Housing Costs
Since the pandemic, U.S. housing costs have skyrocketed, with home prices and mortgage rates climbing by over 40%. These increases strain budgets for families and individuals alike. However, the additional financial burden of raising children exacerbates these challenges for families.
3. Intergenerational Support
Parents are often motivated to help their children and grandchildren secure stable housing. Redfin’s Chief Economist, Daryl Fairweather, explains that grandparents see their financial contributions as a way to support multiple generations.
The Role of Age and Income in Family Support
Younger generations, such as Millennials and Gen Z, are more likely to rely on parental assistance.
- 67% of homebuyers with kids are Millennials or Gen Zers, compared to just 25% of buyers without kids.
- Families with children also tend to have higher incomes: 65% of respondents with kids earn $50,000 or more, compared to 42% of those without kids.
This combination of generational dynamics and income levels helps explain the disparity in financial support between families with and without children.
Coping Strategies for Families
Beyond family contributions, families with kids are more likely to adopt creative solutions to manage housing expenses:
- Side hustles: 23% of homeowners with kids take on additional jobs, compared to 12% of those without.
- Early retirement withdrawals: 14% of families tap into retirement funds early, compared to 9% of child-free homeowners.
These approaches highlight the lengths to which families go to afford their homes in today’s challenging market.
Multi-Generational Housing Trends
As housing costs climb, multi-generational living is becoming more common. Larger homes designed for extended families are in high demand, with features like accessory dwelling units (ADUs) gaining popularity.
Redfin Premier agent Julie Zubiate notes: “Many families are seeking homes with ADUs for older parents or early-20s children. Multi-generational homes provide cost-effective solutions for families navigating today’s high housing prices.”
This trend benefits both younger and older generations, fostering mutual financial and emotional support.
Insights
Why are families with kids more likely to get financial help from relatives?
Families with children face higher costs due to the need for larger homes, better neighborhoods, and child-focused amenities. Relatives often see their contributions as benefiting both children and grandchildren.
How have housing costs changed post-pandemic?
Housing costs in the U.S. have risen over 40% since before the pandemic, driven by soaring property prices and mortgage rates.
What other strategies do families use to afford homes?
Families often work side hustles, withdraw retirement funds early, or explore multi-generational living arrangements to reduce costs.
Are younger generations more likely to rely on family support?
Yes, Millennials and Gen Z homebuyers with kids are particularly likely to seek financial help from parents due to their stage of life and the rising cost of housing.
Conclusion
The Redfin survey highlights the financial pressures families with children face in today’s housing market. From relying on family gifts and inheritance to working side hustles and embracing multi-generational living, these families employ a variety of strategies to achieve homeownership. Understanding these trends provides valuable insights into the broader challenges of affordability and the evolving dynamics of family support in the real estate market.
