José Matos, 24, searches for potential homes on Zillow alongside his mother, Lizet Rodriguez, at their home in Miami on May 10. Matos has been house-hunting with Rodriguez, who is putting $50,000 for the down payment and will co-sign the loan.
Meanwhile, the share of home buyers in their 20s, 30s and early 40s receiving financial help for a down payment is also rising, after declining for much of the past five years. Overall, 12 percent of home buyers relied on down payment help from friends and family as of April, up from 9 percent last year, according to survey data from the National Association of Realtors.
The housing market has slowed precipitously since the Federal Reserve began raising interest rates two years ago. Mortgage costs have gone from all-time lows of about 2.6 percent to more than 7 percent, making it several times more costly to finance a home purchase. The last time borrowing costs were this high was in the early 2000s, a generation ago.
Matos is among a growing group of 20- and 30-somethings who are moving straight from their childhood bedrooms into their first homes. Roughly 1 in 3 young adults are living with their parents, often to save money, an arrangement that picked up during the pandemic and has continued, according to a Pew Research Center analysis of census data.
“These days it almost feels like, ‘Duh, I have to use my parents’ money, there’s no other option,’” said Kristina Modares, a real estate agent in Austin who works primarily with first-time home buyers. “It’s definitely harder for younger people to buy right now, and the boomer generation has a lot more money than Millennials or Gen Z has.”