For most homeowners of the millennial generation, purchasing a home was no easy journey. And for most, in order to own their first home, families and friends came to their help.
One in five of homebuyers received gifts or interest-free loans from family members – with the average amount received from givers being $39,000. Potential homebuyers under the age of 35 plan on having help from family members or friends – and those who have a home have stated they wouldn’t have been able to purchase without the help of the “Bank of Mom and Dad.”
Nigel Wilson, chief executive at Legal & General Group, believes that this “bank” showcases the current growing problem of affordable housing in the United States. Wilson explains, “as the population changes and the millennial generation strives to join the home owning democracy, new thinking is due on meeting the needs and aspirations of Americans.”
While the growing “Bank of Mom and Dad” is alarming – with 15% of family members taking out loans, 8% taking sums out of their 401(k) accounts, and 3% coming out of retirement to help their child in need, it seems to be the biggest motivation for the millennial generation to jump into the homeownership pool.