U.S. parents weigh down-payment savings for young children as housing costs stay high

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Parents saving for kids' homes

Highlights

Coldwell Banker's September survey reports 82% of parents with children 5 and under are saving or considering saving for their child's down payment.
The Atlanta Fed notes average 30-year fixed mortgage rates above 7%, with $126,849 qualified income needed to keep homeownership affordable, 32% above median income.
Redfin data shows 20% of September listings had a price drop, while buyers now total 929,000 versus 1.5 million sellers, increasing negotiation leverage.

Survey findings reflect early housing planning

As reported by Business Insider, Coldwell Banker Affiliates President Mary Lee Blaylock says an emerging trend is parents preparing their children for homeownership well in advance, driven largely by affordability pressures that younger families already face themselves.

Coldwell Banker's September survey finds 82% of parents with children 5 and under are already saving or considering saving for a child's down payment. Fourteen percent say they have already done so, compared with 20% who say they have already set aside money for college.

Blaylock says many Gen Z and millennial parents who recently reached homeownership now understand firsthand how expensive buying and owning a home has become. She says that experience is shaping earlier financial planning for their children.

Affordability strains reshape family support

The broader housing market helps explain the shift. The average 30-year fixed mortgage rate has risen in recent months and remains above 7% for the week ending October 29, while the Atlanta Fed says qualified income needed to keep homeownership at no more than 30% of annual income reaches $126,849 in August, 32% above median household income.

Domonic Purviance of the Atlanta Fed's Supervision and Regulation Division says median-income households are now less likely to be able to buy a home than in the past. At the same time, Redfin data shows 20% of active listings in September had a price drop, up 0.4 percentage points from a year earlier, and that the market had about 929,000 buyers compared with 1.5 million sellers.

That imbalance is giving some buyers more room to negotiate. Redfin Premier agent Amanda Peterson says builders are offering concessions such as rate buydowns, cash incentives and appliances, while some buyers are becoming more selective because supply is relatively plentiful.

Family assistance also remains part of the picture. The Coldwell Banker survey shows 15% of homeowners received down-payment money from family or friends, and 71% of those recipients expect to repay it, though Blaylock says buyers still need to build their own savings rather than depend entirely on outside help.

Our earlier report on Pakistan’s push to expand credit access focused on the government’s plan to boost bank lending for housing, agriculture and small businesses through priority-sector targets and incentives. The piece detailed housing-finance goals for 2024, including funding for new housing units, faster application processing, and simpler documentation to make mortgages more reachable for households.

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