New trend may impact the next generation of homebuyers

In today’s economy, saving enough money for a down payment on a home can be a struggle for young adults. A recent national survey conducted by Better Homes and Gardens® Real Estate found that baby boomers are part of an increasing trend in which they are helping their children and grandchildren become homebuyers.

According to the survey, one in five baby boomers had already financially supported their children or grandchildren in purchasing a home. The survey also found more than two-thirds of baby boomers are willing to provide this type of support in the future.

Baby boomers have been a driving force in the housing market for the past 30 years. The survey data reveals they are using their earnings to invest in the future of their children and grandchildren to help them realize the American dream of homeownership.

Aside from an investment justification, respondents of the survey cited the readiness to provide financial support to their family was out of love. Respondents stated that they could ensure their children and grandchildren would benefit from their assets and help them achieve the American dream.

Key findings of the survey included:

• 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.
• One in 10 baby boomers said they will “definitely” provide their children or grandchildren with financial support for a down payment on a home.
• In total, more than 68 percent 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 support are confident they will do so again.
• 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.
• Respondents age 55 or older and who earned more than $100,000 in annual household income are more likely than their younger counterparts to have previously provided financial support.
• Baby boomers show more interest in “gifting” or loaning money and less interest in co-signing loans.

More than 1,000 adults ages 45 and older were surveyed for this study by Better Homes and Gardens® Real Estate. Data was collected from those who qualified as a baby boomer and who had at least one child or grandchild over the age of 18.