T
he bank of parents is no longer a guaranteed lifeline for many first‑time buyers, a trend that signals deeper shifts in the U.S. housing market.
Jean Frohling and her husband, both in their mid‑60s, had long saved to help their three children buy homes. They gave their first two kids thousands of dollars for down payments, and when their 33‑year‑old daughter found a house near Peoria, Illinois, they chose to buy it outright for $186,000 in cash. “Cash gives us negotiation power and eases the transition,” Frohling said.
Across the country, family support has historically been a key factor. In 2019, 32% of first‑time buyers and 16% of all buyers received help from relatives or friends, according to the National Association of Realtors (NAR). The peak was in 2010, when 36% of first‑time buyers and 24% of all purchasers benefited from family aid.
Yet recent data shows a sharp decline. In 2024, only 25% of first‑time buyers and 10% of all buyers used family assistance. This drop contradicts expectations that rising prices and high mortgage rates would increase the need for parental help. Jessica Lautz, NAR’s deputy chief economist, notes that the new cohort of first‑time buyers is different: they are older, wealthier, and less likely to ask for a handout.
The trend coincides with a shift in buyer demographics. The median age of first‑time buyers rose to 38 in 2023, the highest since 1981, and their share of all purchases fell to 24%. Median household income for first‑time buyers jumped to $97,000, up $26,000 in two years. Older buyers are more self‑sufficient, relying on savings and investment accounts rather than parental gifts.
Despite the decline, family support still plays a role, especially in markets with limited inventory. Mortgage officers in Birmingham, Alabama, and Sacramento, California, report that middle‑class buyers often use family money to upgrade their offers. In Illinois, cash offers can be decisive when homes are scarce. Bill Mitchell, a loan officer, estimates that about 20% of his clients use family funds to strengthen bids.
The reduction in gifting also reflects broader economic uncertainty. Job markets are tightening, student‑loan delinquencies rise, and rent‑to‑buy calculations favor renting more than they have since the early 1980s. Many prospective buyers are waiting for lower rates or price drops before committing.
Even when parents provide cash, it is not a free ride. After the Frohling family bought the Illinois home, their daughter refinanced to repay her parents, taking on a new loan and starting the long process of building equity.
The decline in family assistance may signal a “housing economy of haves and have‑nots.” Older first‑time buyers miss out on decades of equity growth, while younger buyers face a tougher path to ownership. Parents can still influence outcomes through non‑financial means—paying for education, offering advice, or letting children move out of the family home to save on rent.
In short, the traditional “bank of mom and dad” is shrinking, but it remains a powerful tool for those who still have access to it. The market’s new reality is that many buyers are stepping onto the property ladder without that safety net, reshaping the future of homeownership.
