NEW YORK (9/22/14)--Families are stepping in to help first-time homebuyers break into the housing market, as last year 27% of those buying a home for the first time received cash from relatives or friends to help with the down payment, according to National Association of Realtors (NAR) data (Bloomberg.com Sept. 19).
Compared with last year, that's a 24% rise, matching the highest number since 2009.
Without first-time homebuyers, "the recovery's not sustainable," Anika Khan, Wells Fargo Securities senior economist, told Bloomberg, adding that more money in the hands of first-time homebuyers only speeds up the housing recovery.
The biggest barrier for first-time homebuyers is that many continue to grapple with student-loan debt that keeps them from saving enough money for a down payment.
A recent NAR survey found that 54% of first-time homebuyers in 2013 said their home purchases were delayed because their student loans.
First-time buyers made up 29% of previously owned home purchases in July, compared with 40% historically for the month (Bloomberg.com).
But the infusion of cash from parents and families is helping to bridge that gap.
"We're finding more and more parents are gifting money," Deborah Baisden, realtor at Prudential Towne Realty, told Bloomberg. "Because of student debt and because of kids having a tough time finding jobs, it's becoming increasingly difficult for them to be able to buy homes."
"We're turning into a country of renters," she added.