A Coldwell Banker report found 82% of parents with children 5 and under are saving or considering saving for their child’s down payment, with Mary Lee Blaylock, president of Coldwell Banker Affiliates, saying people "can’t just rely on pennies from heaven."
Blaylock told Business Insider on Sunday that parents preparing their children for homeownership years in advance is an emerging trend. In the survey, 14% of surveyed parents had already saved for a down payment, compared with 20% who had saved for their child’s college.
Coldwell Banker Survey on Down Payment Savings
Blaylock said young parents who just became homeowners realize how expensive owning a home can be. Most Gen Z and millennial parents surveyed said they have either considered or already begun saving.
The survey also found 15% of surveyed homeowners received down payment money from family or friends, and 71% of those who received family money expect to pay it back. Blaylock said older relatives could also help adult children or young grandchildren, though people still need to save.
Atlanta Fed on Homebuyer Income Needs
The Federal Reserve Bank of Atlanta tracks the qualified income needed for homeownership to take up no more than 30% of annual income, a standard affordability measure. As of August, it was $126,849, and median household income is 32% lower.
Domonic Purviance of the Atlanta Fed’s Supervision and Regulation Division told Business Insider that historically, people earning the median income or below could still be homebuyers, adding: "Well, that’s less likely today."
Realtor.com and J.P. Morgan on Homeownership
On saving for a down payment, Realtor.com Senior Economist Joel Berner told FOX Business that a weaker labor market, combined with wages growing more slowly than inflation, could make it harder for households to save and buy homes. "The labor market is really the underpinning of the housing market," he said.
On homeownership among younger adults, Bennett Parrish of Economic and Policy Research at J.P. Morgan said the national homeownership rate is 65.2%, but ownership among people under 35 has fallen from 39% in early 2022 to a nine-year low of 35%.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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