A national survey commissioned by Better Homes and Gardens® Real Estate has found that baby boomers are part of a growing trend in which they are helping their children or grandchildren become home owners. According to the survey, one in five baby boomers has already gifted, loaned or co-signed a loan to support their children or grandchildren in purchasing a home, and more than two-thirds of boomers want to provide this type of support in the future.
I have seen this first hand in my transactions. I can think of at least half a dozen sales with this type of support/help over the past year or so. In fact, I recently had an adorable young couple who had just moved back to the area and were still in the process of finding and starting new jobs. With a young child and another on the way, living in their parents’ basement wasn’t ideal but navigating though the lending process with new jobs was difficult. So the in-laws were able and willing to loan them the money to purchase the perfect house. The plan, of course, is for them to get their own loan as soon as they can but in the meantime this solution worked great for everyone involved.
Aside from the good investment rationale, baby boomer respondents in the survey cited that the willingness to provide financial support to their children and/or grandchildren was out of love. By providing financial support to assist in the home buying process, respondents stated that they could ensure their children and/or grandchildren would benefit from their estate and fulfill a large part of achieving the American dream.
Key findings from the Better Homes and Gardens Real Estate baby boomer survey include:
- One in five baby boomers have already gifted, loaned or co-signed a loan to their children or grandchildren for a down payment on a home.
- Looking ahead, one in 10 baby boomers say they will “definitely” provide their children or grandchildren with financial support for a down payment on a home, and at least half hope to do so.
- In total, more than two-thirds (68%) of all baby boomers said they want to provide future financial support for their children or grandchildren to purchase a home.
- Those who have already provided past support are also most confident that they will do so again.
- Highest interest in providing support is reported among younger (age 45-54), more affluent (household income of $75,000+) baby boomers who have at least one adult child (age 18-34).
- Baby boomers are driven to provide financial support primarily by their belief in the overall investment value for them and/or their children or grandchildren, and the role homeownership plays in fulfilling the American dream.
- Older (age 55+) and more affluent ($100,000+ household income) baby boomers are more likely than their younger or less affluent counterparts to have previously provided financial support.
- Across prior support and future interest, baby boomers show more interest in gifting or loaning money; they are least interested in co-signing loans.
What about you? Would you consider helping your children or grandchildren buy a home? Or have you been helped by a parent or grandparent?
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