Welcome to the 'nepo' housing market: 40% of homebuyers under 30 get family money to cover their down payment
Welcome to the 'nepo' housing market: 40% of homebuyers under 30 get family money to cover their down payment
Redfin chief economist Daryl Fairweather: "It seems like the only way to kind of get your foot in the door to the housing market is to have some help"
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I don't get it.
I understand the current housing market is messed up, but parents helping their kids putting a down payment for their house is dystopic "nepotism" now? Wouldn't you help your loved ones if you have the means to do so even if you are not super rich?
Would it have been better if they told their kids to pick themselves up by their own bootstrap and get a 30 year loan from big banks instead?
You said that you don't get it. The point isn't that people are evil for helping their kids, the point is if the housing market is running on the assumption that houses are worth what a family plus their parents will pay for them, regular families won't be able to afford houses. If everyone agreed that regular young families should be able to afford a house and didn't rely on older mom and dad for money, houses would be more affordable for everyone.
I couldn't read the article because of the pay wall, but did they say what the 40% is an increase from? I know I got some help from my parents on a down payment in 1995, and it wasn't super unusual then.
Edit your comment to say, "in the limited circle of people I am exposed to" and your comment would include the context within which is often left our of these types of anecdotal statements.
For example, in the limited circle of people I am exposed to, the people I grew up with mostly ended up as burnouts, prisoners, or permanent renters.
We are limited by our reference frame, unless we are willing to step outside of our own anecdotes. And even then, it is not easy because humans don't think stochastically.
You seem to be making at least as many statements without data as I was, but at least I couched mine as personal experience, and the main point of my post was that if like to see the data. Do you actually know what percent of new home buyers got help from their family over the years, or are you taking shots at my comment without anything better to add?
Exactly, that was the point. If everyone shares data using only their personal perspectives then nothing advances. I did what you did, and illustrated the exact opposite point, showing the weakness of the original tactic. Neither of us said anything of value, but I suppose I wasn't as clear as I could have been. I'm not the best phone writer.
For example, in the limited circle of people I am exposed to, the people I grew up with mostly ended up as burnouts, prisoners, or permanent renters.
No offense, but maybe you need to hang out with a different crowd. Peers affect your development and success in life.
Correlation, causation
Starting out with no offense, then stating something that is transparently intended to cause offense, is such a thinly veiled tact that I feel bad that it is the best you could come up with. Just say what you want to say, no need to attempt to decorate it, especially so poorly.
Nonetheless, I'm doing quite fine in life, and even if I wasn't, it has no impact on the statement. That stated alone nullifies your comment. But I would like you to elaborate if you wish, I am unaware of anyone who controlled the circumstances of their birth, region of birth, or parents, but if you have guidance on how to do so, I welcome your advice.
A problem I've seen is that since the 90s there has been a progression from small, affordable ranch houses and such to minimansions. Homes have simply gotten bigger. One thing driving it has been the double income household, not only has this driven up prices since the homes simply cost more to make but with two people paying the mortgage you are now in a situation where if one person loses their income you can't cover for them. If it was a single income household and, say, you got disabled the other person could possibly cover for you.
only rich kids being able to afford houses is dystopic
Ok, if you are a middle class parent with a little bit of savings, and one of your child wants to buy a house, wouldn't you do everything you can with your money to help them too?
You don't have to be rich to want the best for your kids, and I really hate the selfish boomer mentalities of "oh I have it hard back in my day, so I'm not going to help my kids with anything to teach them a lesson about life." It's fucked up.
You're looking at it backwards. Nobody is saying that it's bad to help your family succeed. They're saying that it's fucked up that the only way gen-Z adults can afford homes is for their parents to pay their way.
I mean, this is the point I'm trying to make and I am agreeing with your statement here, and I honestly don't know what exactly we are disagreeing about.
The word "Nepotism" does have a negative connotation, so the article title is saying to me: "Helping your family succeed is nepotism and that's bad.". At least, that's the way I read it. Did I interpret it wrong?
The point is more "Success requires help from your family, and that's bad". There's nothing wrong with helping your kids succeed, but if economic conditions preclude most people without help from their parents from success, then success becomes intrinsically linked to the success of your parents. That sort of economic situation balloons into overt classism very quickly, which is the bad part.
But none of that is nepotism. It's a stupid word choice for this article.
The article just uses the prefix "nepo-", from the Latin for nephew/descendent, implying that the market is dominated by homebuyers that are distinguished by being someone's descendent.
Class mobility is the term. We still have it, but mostly in one direction.
"We all float down here." 😅
Two sides to a coin, and also the difference between micro and macro. On an individual level, of course you're gonna help your kids, but on a large scale if help from family is required despite being otherwise doing everything you need to go (working, not squandering your money, etc), that's just bad news for the economy, and indeed promotes "nepotism", the bad kind.
Ok, if you are a middle class parent with a little bit of savings, and one of your child wants to buy a house, wouldn't you do everything you can with your money to help them too?
Some peoples don't have very nice parents, but that's besides the point. The point people are trying to get across is that you shouldn't have to depend on the generosity and fortune of your parents to ever dream of owning a home.
This isn't a criticism of parents wanting give their kids a headstart, it a criticism of dog eat dog capitalism.
I got curious about how the rate of home ownership compares now to in years prior. I found this chart on the Wikipedia article. That says that since the early 70s, the rate of home ownership has varied between just over 60% and just under 70%, and we're right about in the middle of the range now, coming off of a low about five years ago. I feel like people have this image that everyone has been able to afford a home until the last decade or so, but that doesn't seem to be the case.
On the other hand, wage stagnation is a very real problem, and my personal opinion is that it's a critical one for the country to address because a strong middle class has been key to our success for ages.
Then place the blame on capitalism instead of blaming what good parents are forced to do to help their kids under the current broken system, which was my point.
Ok, if you are a middle class parent with a little bit of savings, and one of your child wants to buy a house, wouldn’t you do everything you can with your money to help them too?
The point is that less and less people are in this position. Middle class parents with savings? What is this, 1985?
Many people saved up a decent amount money during COVID in the States, so I think that the cultural shift towards having a good amount of saving in bank accounts is starting for middle class Americans, especially given the economic uncertainties right now.
A few thousand saved up because of government programs and policies that have now largely expired isn't gonna net you a house anywhere in the US afaik.
They’re just about through those savings. Inflation + “catch up” vacations are the culprits. Look at credit card debt and that is before student loan payments restarted.
That's a bit depressing, but good to know.
You seem to only be reaching for the "take this comment as a personal attack on my situation" part and missing the "this is a worrying trend if the requirement of home ownership is a stable family. Or stated more simply inference vs implication, pause being the "main character" of this comment section for a moment, because no one is discussing you. It would be helpful if you would stop inferring that we are. We have no control over your inferences.
To the topic, a stable family is something you are born into, an inheritance of its own. No one chooses their parents. The topic isn't "being a bad parent is badass!" but instead that "inheriting good parents" is now a requirement for home ownership. If you cannot see through this lens, I doubt further commentary would assist.
pause being the “main character” of this comment section for a moment
I love this and it's a reminder that nearly every comment section needs.
Please don't put words in my mouth. Thanks.
middle class parent
No such thing lol
Do anything for your kids != do everything for your kids. I get where you are coming from but putting kids in a house they possibly can't afford can be a bigger issue later down the road.
But the housing market is so messed up right now that even "starter homes" are completely unaffordable to people that doesn't make ridiculous amounts of money, and that's a trend for everywhere in the States even in previously low cost of living areas.
In other words, the "house that normal people can afford" is going extinct, and that is actual messed up part, not parents helping their kids survive a messed up housing market.
It will just create an ever greater divide between the haves and have nots
I believe the point is that people need nepotism to afford a house
Calling it "nepotism" is really weird. It's just family lending money to their kids.
Nepotism would be more like your parents owned a second home with renters living there, then you kicked the renters out because of your family connection just to live there rent free.
How are you in every thread on this website?
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The dystopic aspect isn't the individuals. It's the system that requires it.
Let me get this straight. 4 generations living under the same roof is traditional, but helping your kids buy a house is dystopian?
Is this just coming from the “money is a crime” crowd?
helping your kids buy a house is dystopian?
It's dystopian when the only way to own a house is to be born into wealth. And we aren't there yet but that's where we are headed based on the stats.
Nepotism is a highly searched word at the moment for a number of reasons. They're hoping to game the SEO off the word and make their article more visible.
Wouldn't you help your loved ones if you have the means to do so even if you are not super rich?
Counter-point, I'm gay.
