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Yahoo
4 hours ago
- Business
- Yahoo
From Down Payments to Deeds: A Parent's Role in Their Child's First Home
Leslie Sherman and her husband Conrad Useldinger never imagined they would own a home. The couple live in San Jose, CA, one of the fastest-moving and most expensive housing markets in the country, and they had accepted they would be renters for life. That is, until Leslie's parents made an offer: Let's buy a home together. Across the country, families like the Shermans are forging new paths to homeownership—ones that blend financial support with co-ownership, legal contracts, and sometimes, family negotiations that rival real estate closings in complexity. The reasons are clear: High home prices, stubborn interest rates, and generational wealth disparities have made it nearly impossible for many first-time buyers to get in the game without help. But stepping in as a parent isn't as simple as writing a check. Today's family-financed home purchases come with financial, legal, and emotional considerations that can affect everyone involved. Why more parents are getting involved The numbers tell a clear story. In 2024, just 24% of homebuyers were purchasing their first home, the lowest share on record since 1981, according to the National Association of Realtors®. That's not for lack of interest. Instead, it's a direct result of affordability barriers that even two full-time incomes can't always overcome. Rising mortgage rates, persistent student debt, and home prices that have refused to fall in meaningful ways are making it nearly impossible for younger generations to buy without a financial boost. That's why parents are increasingly stepping in as co-investors, co-signers, and co-owners. From 1994 to 2022, the proportion of young homebuyers relying on a co-signer of an older generation more than doubled from 1.6% to 3.7%, according to analysis from Freddie Mac. The trend is even more marked among the youngest homeowners with as much as 38% of Gen Z homebuyers getting help from their parents to make their first home purchase, according to a Credit Karma and Intuit study. Even in more affordable markets, parental support is becoming the hidden engine behind many first-time purchases. While the list of top markets for first-time buyers in 2025 from includes relatively accessible areas like Rochester, NY ($129,900 median listing price) and Harrisburg, PA ($140,000), even those price tags can be daunting for buyers in their 20s and 30s. In these cases, the help might not be as dramatic as an $850,000 condo split four ways—as in the case of the Shermans—but a smaller gift, a co-signed loan, or even a symbolic show of financial backing can mean the difference between a winning offer and another year of renting. The many forms of support—and what each one means There's no one-size-fits-all way for parents to help their kids buy a home. From behind-the-scenes financial boosts to full-blown co-ownership, today's family-backed purchases take many forms and each comes with its own legal, financial, and emotional implications. Gifting a down payment The most common way parents help is by contributing to the down payment, often in the form of a gift. In 2025, the IRS allows individuals to gift up to $19,000 per recipient without triggering the gift tax. If the gift exceeds that threshold, the donor may need to report it to the IRS, though many won't owe taxes unless they've already used up their lifetime exclusion of $13.99 million. But for the gift to pass muster with a lender, it can't be informal. Most mortgage underwriters will require a signed gift letter from the parents stating that the money is a gift, not a loan, and that it doesn't need to be repaid. Lenders may also ask for bank statements and transfer records to verify the source and movement of the funds. If that paperwork isn't clear, it can slow down or even jeopardize the loan approval. Co-signing a mortgage For parents whose children are struggling to qualify for a mortgage—whether due to limited credit history or a high debt-to-income ratio—co-signing the loan can be an easy way to help. While no cash changes hands upfront, the financial risks are real. When you co-sign, you're not just vouching for your child, you're legally on the hook. If they miss a payment or default, your credit will take the hit, and lenders can come after you for repayment. It can also introduce emotional complications: Who's really in charge when you're both liable for missed payments? If boundaries and expectations aren't clearly set from the start, the line between helping and overstepping can quickly blur. Co-ownership or buying outright Some families go even further and buy the home together, as the Shermans did. In these cases, all parties are typically listed on the deed, and ownership is often structured as a Joint Tenancy With Right of Survivorship (JTWROS) or Tenants in Common (TIC). In a JTWROS agreement, ownership is equal among all parties and is automatically transferred upon death, while a TIC allows for unequal ownership shares and lets each party designate their own heir. In recent years, more families have also opted for a shared equity agreement, a more customizable co-ownership model that outlines exactly who owns what and how future gains (or losses) will be divided. Shared equity agreements are especially useful when the parent contribution is substantial but not purely a gift. In the Sherman family's case, the parents covered 75% of the purchase price and hold 75% ownership. When the home sells, that same ratio will determine how proceeds are split. From support to strings: Setting boundaries and expectations For many parents, helping a child buy their first home feels like a natural extension of love and support. But when money changes hands without clear agreements, even close families can run into trouble. Tension doesn't always start with big disagreements; it can creep in through everyday decisions. A parent who contributed to the down payment might expect a say in renovations or reimbursement when the home is sold. A child might feel obligated to stay in a city longer than planned, unsure if the house is truly theirs. That's why it's essential to put everything in writing before closing. A co-ownership agreement can help families navigate these murky waters with certainty. It should outline: How costs like mortgage payments, taxes, and maintenance will be split What happens if one party wants to sell or exit Whether the remaining owners get the first right to buy out the departing share A neutral third party—like a financial planner or estate attorney—can help craft an agreement that sets clear expectations for everyone involved and avoid hard conversations later. It might not feel warm and fuzzy in the moment, but putting everything in writing is often the kindest thing a family can do for itself. Related Articles Connecticut Defies Housing Trends, Keeping Homes Affordable for the Middle Class 23.9% of Homeowners in Connecticut Will Face a Hidden Home Equity Tax If They Sell Hartford Ranks Among America's Hottest Housing Markets Solve the daily Crossword
Daily Mail
a day ago
- Business
- Daily Mail
Why Americans end up choosing where they will buy a home
Man's best friend is no exaggeration. People love their animals so much that they top the checklist when it comes to where they decide to buy a home. Dogs and cats are the most common household pets, and we're spending more time and money on them than ever, reports the National Association of Realtors (NAR). About one in five recent homebuyers considered their pet when choosing a neighborhood, a number that increases among unmarried couples and single women buyers. Factors such as proximity to a veterinarian and outdoor space are both seriously important considerations for buyers. Pet lovers also purchased homes in areas with larger lots or acreage, and were more interested in convenience to parks and recreation areas, as well as walkability. 'Pet owners are often not willing to sacrifice for the needs of their beloved fur baby,' Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors, told 'An adopted puppy may start small, but as they grow into a 100-pound dog, enough room to house both the pet and humans takes a more important role.' She continued: 'Not only can having a pet spur purchasing a home, but when they move, they want a fenced yard and flooring suddenly becomes an important consideration. These home features can be as luxurious as an animal washing station, cat litter closets, and even outdoor features like a water feature or a catio.' Lautz added that many buyers often ask how far the nearest dog park is. 'For pet owners, home buying transcends not only the home features but expands to the neighborhood,' she said. 'Walkability, the perfect dog park, and proximity to the vet are important to pet owners.' Throughout the COVID-19 pandemic, Americans adopted pets for companionship and entertainment. This trend has since eased from its recent peak, but Americans are still investing more time and financial resources in their animals. According to data from the American Pet Products Association, total spending on the US pet industry grew from $53.3 billion in 2012 to $152 billion in 2024. Now, there are officially more households with pets than children in the US, according to the NAR. The share of families with children under the age of 18 living in their home has continued to decline, the US Census reveals. The share of families with children under the age of 18 in 2024 stood at 39 percent, down from 52 percent in 1950. This is likely due to two reasons. Birth rates, overall, have been declining, and a large share of baby boomer households have already seen their children leave the nest. This trend is also reflected among homebuyers. In 1985, 58 percent of home buyers had children under the age of 18 in their homes. In 2024, just 27 percent of home buyers had a child under the age of 18 in their home, an all-time record low. The number of pets has not only gone up, but the amount of time Americans spend with their animals has also increased significantly over the past 20 years. In 2003, 13.2 percent of Americans spent a significant amount of time with their pets daily, according to the BLS American Time Use Survey. In 2023, that share has grown to 20.4 percent, and 23.8 percent of women. Some 17 percent of single women considered factoring their pet into their neighborhood choice, compared to 12 percent of single men.
Daily Mail
3 days ago
- General
- Daily Mail
Adorable reason Americans end up choosing the neighborhood where they'll buy a home
Man's best friend is no exaggeration. People love their animals so much that they top the checklist when it comes to where they decide to buy a home. Dogs and cats are the most common household pets, and we're spending more time and money on them than ever, reports the National Association of Realtors (NAR). About one in five recent homebuyers considered their pet when choosing a neighborhood, a number that increases among unmarried couples and single women buyers. Factors such as proximity to a veterinarian and outdoor space are both seriously important considerations for buyers. Pet lovers also purchased homes in areas with larger lots or acreage, and were more interested in convenience to parks and recreation areas, as well as walkability. 'Pet owners are often not willing to sacrifice for the needs of their beloved fur baby,' Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors, told 'An adopted puppy may start small, but as they grow into a 100-pound dog, enough room to house both the pet and humans takes a more important role.' She continued: 'Not only can having a pet spur purchasing a home, but when they move, they want a fenced yard and flooring suddenly becomes an important consideration. 'These home features can be as luxurious as an animal washing station, cat litter closets, and even outdoor features like a water feature or a catio.' Lautz added that many buyers often ask how far the nearest dog park is. 'For pet owners, home buying transcends not only the home features but expands to the neighborhood,' she said. 'Walkability, the perfect dog park, and proximity to the vet are important to pet owners.' And over the last 20 years, there has only been a rise in pet ownership. According to the American Pet Products Association, 71 percent of American households own a pet. This is up from 56 percent in 1988. Among all unmarried couples, 24 percent of home buyers considered their pet when deciding on a neighborhood in which to purchase, compared to 15 percent of married couples. Throughout the COVID-19 pandemic, Americans adopted pets for companionship and entertainment. This trend has since eased from its recent peak, but Americans are still investing more time and financial resources in their animals. According to data from the American Pet Products Association, total spending on the US pet industry grew from $53.3 billion in 2012 to $152 billion in 2024. Now, there are officially more households with pets than children in the US, according to the NAR. The share of families with children under the age of 18 living in their home has continued to decline, the US Census reveals. The share of families with children under the age of 18 in 2024 stood at 39 percent, down from 52 percent in 1950. This is likely due to two reasons. Birth rates, overall, have been declining, and a large share of baby boomer households have already seen their children leave the nest. This trend is also reflected among homebuyers. In 1985, 58 percent of home buyers had children under the age of 18 in their homes. In 2024, just 27 percent of home buyers had a child under the age of 18 in their home, an all-time record low. The number of pets has not only gone up, but the amount of time Americans spend with their animals has also increased significantly over the past 20 years. In 2003, 13.2 percent of Americans spent a significant amount of time with their pets daily, according to the BLS American Time Use Survey. In 2023, that share has grown to 20.4 percent, and 23.8 percent of women. Some 17 percent of single women considered factoring their pet into their neighborhood choice, compared to 12 percent of single men.
Bloomberg
7 days ago
- Business
- Bloomberg
Chinese Buyers Spent 83% More on US Homes This Year
Chinese buyers remained the largest group of foreign investors in US residential real estate by both dollar value and number of purchases. They acquired $13.7 billion worth of homes in the US from April 2024 through March, representing an 83% jump from a year earlier, according to a report by the National Association of Realtors.
Bloomberg
09-07-2025
- Business
- Bloomberg
The 3 Best Ways to Give Your Kid Real Estate — and What Not to Do
Wealth How To The key to owning property may no longer be related to income or credit, but having parents who can hand over a home the right way. The greatest financial hand-off in history is underway, and Monopoly-minded Americans have a rare opportunity. Experts estimate that US families will pass on more than $105 trillion in assets over the next few decades, and the real estate game is an especially interesting one. For heirs staring down soaring housing costs — a nearly 70% spike in the median home price since January 2019, hitting $422,800 in May 2025, according to data from the National Association of Realtors — this gameplay could be a lifeline.
