The report pointed out that those under 35 are by far the most likely to have already received help to buy if they are homeowners (43 percent). A majority of this age group also expects help if they have not yet bought a home (51 percent). By contrast, hardly any of those in or approaching retirement received help. “The fact is that a third of millennials are only able to own a home thanks to the generosity of retirees and over 55s,’ the report said.’
It’s worth noting that the baby boomer generation is the wealthiest in history. By 2020, they are expected to account for just over half of all net household wealth in the U.S., and will eventually be passing on $30 trillion to their heirs, according to the report. More than half of those surveyed said they were able to finance their lending from their cash savings.
But that comes at a cost, the report said, pointing out that unlike banks, BoMaD has its limits, and there is no one to step in if capital runs out. The survey shows many people at or approaching retirement age—and many who are adjusting to life on a lower income are making real sacrifices to help younger buyers. They take out loans, raid their 401(k) savings, downsize their homes and delay retirement, the report noted.
Financial planner Luis Rosa of Build a Better Financial Future in Henderson, Nev., suggests one way parents can help without breaking the bank is to allow for their adult child to live with them for a year or so before they buy the house. “If circumstances allow, this is a great way for the child to save for their own down payment by saving the rent they would have paid their landlord. The parent gets to help out without having to spend money doing so," he said.
“If that is not possible, I recommend that parents keep in mind that their children can buy a home with less than 20 percent down—provided they qualify and can afford it—so if they want to help financially perhaps they can assist with paying their closing costs, etc. without having to come up with a large sum of money that might put their own finances at risk,’ he said.’
The BoMaD USA research was compiled using original survey data of 2,177 total respondents throughout the U.S., as well as existing data sources relating to transaction levels.