My American Boomer parents view helping my sister and I out with things like this as a legal early inheritance transfer to make up for how long we expect their lives to go on. In that way, this isn't really different from being able to buy things because you received an actual inheritance after your parents died.
The problem isn't the people who are able to do this. The problem is that other people for generations have been systematically robbed from also being able to do this. We should have government programs to provide this service for those people to make up for that generational theft.
Also: Jesus, Canada, build some fucking housing what the fuck. I knew it was bad, but I assumed it was on par with the US.
This graph is cherry picked from the worst of Canadian sectors and the best of American. Still in general Canadian housing is bad. The problem isn't about building houses. Everyone wants to live within 30 miles of the border. All our farm land and natural green space is in the same location. So what would you do? Which would you have us do? Bulldoze farm land, or bulldoze protected green space that is already threatened? If it was as easy as "build houses" we could have done that. We have more than enough houses/accommodation for everyone. But much of the available supply is bought up by people that have more money than the people that need the housing. Add in foreign investment, corporations, speculation and pent up demand.... Well here we are.
I mean, the same could be said for the larger regional areas of the US surrounding the cities that are experiencing the fastest increase in housing prices. But the problem, like you said, is people want to live in a small area that is already occupied, and not always where the available houses are (when they're available and not being hoarded by "investors")
I know that here in the Boston area what we need is more housING but not more housES. Build up, not out. And make vertical housing actually appealing by building walkable neighborhoods with access to good public transit so cars aren't a necessity.
The problem isn’t about building houses. Everyone wants to live within 30 miles of the border. All our farm land and natural green space is in the same location. So what would you do? Which would you have us do? Bulldoze farm land, or bulldoze protected green space that is already threatened? If it was as easy as “build houses” we could have done that.
IDK, the student loans program in the US didn't work out very well, and a lot of people just ended up with a ton of debt they couldn't handle. I'm worried the same would happen with a federal housing loan.
What we need instead is better housing density. Right now, if you want to buy a property (at least in the US), you need to also buy a car and commute long distances because that's the only way you're going to be able to afford a place at all. If we instead built more mixed housing near transit lines (e.g. business at ground level and a purchasable apartment above it), you could own something and not need a car to get around. That would work for the first few years, and if you decide to grow your family, you could use your equity as a down payment on a larger place.
But we really don't have much in the way of a starter home. In my area, $300k is "cheap," and with loans now around 7%, you're going to need a larger down payment to keep mortgage payments reasonable. Most new construction around here is either luxury apartments or high end housing.
If we instead built more mixed housing near transit lines (e.g. business at ground level and a purchasable apartment above it), you could own something and not need a car to get around.
Unfortunately, zoning laws don't allow this in most US cities
The Downpayment Toward Equity Act (currently still in Congress, but already budgeted for) is meant to address the generational wealth gap you described, so there is hope. It would give a $25,000 grant to first-generation first-time home buyers.
I don't think anyone should be ashamed of getting help from parents for buying a home. As you said, it is essentially an advance on one's inheritance. Nepotism is favoritism for something intended to be merit-based.
It sucks for people who aren't able to get financial assistance from their family (I'm one of them) but this isn't nepotism. This is families doing what is necessary to get a first house in a lot of current housing markets. Nepotism would be if houses were only being sold to family members/acquaintances of the owners.
This has been a thing for quite a while. Families also band together to loan someone cash so they could make an all cash offer, then refinance after the purchase to pay back the loaned cash.
Calling it nepotism for home buying is just sour. I dont know what kind of money bags is putting 20%+ on a first time buyers home but if they can do it then id rather that then sone fucking chinese pool landlord barrons that own 5000 houses accross the country to leave empty.
Hasn't it always been like that? Article doesn't really give any comparison figures against prior years, but I really don't think this is anything new.
This isn't "nepotism" and trying to conflate everything with "nepotism" is really just providing cover for Capitalism. Having rich parents is a thing that will always occur. Parents that are able to provide you with more support is not the issue here. The issue is that Capitalism has made it where without more support, the average person cannot afford a home.
My parents couldn't help me when I was house shopping. I got a USDA mortgage so I had no down payment, just closing costs. I recommend it for anyone living in or wanting to move to a rural area. There's a minimum credit requirement and the house has to meet HUD specs and a couple other things which are annoying.
Well I mean yeah we bought our house off my father-in-law who sold it at extreme mates rates, and my parents paid my half of the deposit. And I don't think that's news, that's the way it's been for people I know for the last 10 years or so. We only relatively recently managed to get a mortgage because I was doing contract work for a long time which paid a lot better but isn't stable enough to get one.
I feel lucky because I know there's no way I'd be able to live in our own house without parental help - we're both public sector workers so we do alright but don't have any money to put aside for savings. Which also means we won't be able to return the favour for our son, or at least not to the same degree. I've just turned 40, I have friends a few years younger who are working but still live with family because they have no other realistic option.
My father-in-law worked in the property world as a surveyor since the 70s or so and when his father died young he bought some flats in London with the inheritance. His dad was a miner so the flats were dirt cheap but they were in King's Cross which back then was known for drugs and prostitution. He despised the 80s, because he knew it was short term gain for his generation at the expense at the next ones - instead of investing in the future, governments were just selling everything off to the private sector for short term gain, and so he had this masterplan of saving all this stuff up for his kids. He's an interesting person to talk to.
My parents had enough money to put aside in savings for the future for me and my sister every month, which went towards the house deposit and my university fees. They didn't own any flats in London but they had that extra to put aside. That's what our generation doesn't have, the ability to put anything significant aside for the future - it all goes on bills.
I have received $0 from my parents. My grandma helped me buy some furniture when I moved out to my first apartment, and bless her for that. But I cannot comprehend asking for that much money from my parents, not that they would have it to give me anyway. I feel bad when they want to pay for my dinner, let alone $30k+.
Despite that, I have managed to save more than enough saved for a down payment. But with the market the way it is I have no interest in dropping that much money for a house, especially when our landlord hasn't raised the rent for years and we have a good deal. $30k from your parents is a drop in the bucket when you're looking at a huge ass mortgage payment every month. A house would have to be magical as fuck for the amount they are gonna charge per month with the current prices and rates.
What? There is no limit on the size of funds that can be gifted to help buy a house in the UK. If your family wants to bung you £500k of their own money there's nothing stopping them.
The requirement to demonstrate proof of funds for that money is to prevent money laundering.
Would absolutely have been impossible for us without money from my mother's trust (deceased) and my father. Even living cheaply, with a very good deal on an apartment that we luckily locked in as COVID started and rent increases were put on moratorium, the appreciation of properties was so aggressive that saving $1300 a month meant we were actually losing ground on hitting a 20% down-payment on half decent starter homes. We desperately need the housing bubble to burst, but it's not even """really""" a bubble.