More parents assist their children in housing market due to surging prices

More parents assist their children in housing market due to surging prices
A growing number of homebuyers received financial assistance from their parents in order to purchase real estate in today’s market. Around 43% homebuyers below the age of 35 years got help from other family members and parents (found in a survey by Legal and General). In the year 2018, throughout the United States, the property worth $317 billion (approx.) was bought with assistance (partial or full) of either parents or family members of the homebuyers.

With the current rise in the property prices, this assistance seems to be becoming a necessity among homebuyers. The down payment can be unaffordable for potential buyers, in some cities where the cost of living is high and property prices are high too, such a problem can become more intensified. The gap between debt service costs and monthly house payments can be too big sometimes.

Such a problem will persist and the parents will have a desire to support their children so that they have a strong footing in housing market. Support or assistance to their children must be given in such a way that the plan for buying of their retirement homes doesn’t get affected adversely.

Parents can use various options for assisting their children, but in absence of large sum of liquid funds, primary assets like savings and retirement accounts can be accessed. Such accounts do give you compounding returns, but when you lose money from them, it can be an uncomfortable situation to be in. If you shelled out the money through your retirement and savings accounts for your child’s assistance, then make sure it is repaid to avert any trouble in future.