Withdrawals From the Bank of Mom and Dad Hit Record Highs as Gen Z Battles 2026 Home Prices

The dream of homeownership has been difficult for many Americans lately, as a combination of high interest and mortgage rates, inflation, and high home prices has made this journey challenging.

For younger Americans, it’s even more difficult. The median age of first-time homebuyers jumped to 40 in 2025, up from 30 in 1990, according to the National Association of Realtors (NAR), “driven by home prices rising nearly twice as fast as incomes and the time required to save for a down payment increasing from 3 years to nearly 10.”

Underscoring how a longer accumulation window compounds financial security, the recent Realtor.com® Generational Wealth report found that purchasing a home by age 30 is associated with a 22.5% higher net worth (by $119,000) at age 50 than buying in one’s 40s.

So it’s not surprising that this younger generation is increasingly turning to the “Bank of Mom and Dad” to buy a home, as a Veterans United survey recently incovered.

A whopping 6 in 10 parents (59%) have provided or plan to provide financial assistance, whether with a down payment contribution, a cash gift, or assisting with closing costs, among many other ways, the survey found.

Meanwhile, a separate Wells Fargo survey found that 64% of Gen Zers rely on their parents financially, “whether for money, housing, or other support.”

Biggest hurdles preventing young people from buying a home on their own

Chris Birk, VP of mortgage insight at Veterans United Home Loans, says that while it’s difficult to identify a single hurdle preventing young people from buying a home, several factors—including credit, income, and affordability issues—contribute.

“Our survey shows the biggest pressure points are upfront costs, with many parents stepping in to help cover a down payment or closing costs that can take years for younger buyers to save on their own,” Birk says.

“These early expenses are often what stand between prospective buyers and actually getting into a home. That’s why more parents are stepping in to help bridge that gap and make homeownership possible sooner.”

According to a Veterans United survey, the most frequent assistance is a down payment contribution, cited by 33% of respondents. Other significant ways parents are stepping in include gifting cash (30%), assisting with closing costs (27%), allowing children to live at home to save (27%), and covering furnishings or home improvements (25%).

Cody Schuiteboer, president and CEO of Best Interest Financial, says the traditional move-out age of 22 is history and agrees that, for young people, "staying home is a sensible way to build a savings buffer to purchase a property."

“I know clients in their late 20s who decided to live at home for three or four years just to accumulate enough savings for a down payment. The 27% of parents who allow their kids to move back home to save money for a deposit make their child's life much easier,” he says.

Some experts, such as Blake O’Shaughnessy, co-founder of Ownli, a real estate platform, argue that this isn’t a temporary blip; it’s what happens when affordability breaks and nothing else adjusts.

“People aren’t just delaying independence; they’re being priced out of it. And if the industry keeps operating the same way while costs climb, it shouldn’t be surprised when an entire generation can’t participate without help,” O’Shaughnessy adds.

Risks for parents who may be jeopardizing their own retirement or home security

Still, there are drawbacks to taking money from one's parents.

Stephen Kates, CFP, Bankrate financial analyst, says that these kinds of gifts or contributions can selectively unlock housing access for aspiring young homeowners, but they can also help sustain prices that leave housing unaffordable.

“Subsidies, whether from the government or family members, put a floor under prices that might otherwise grow more slowly or fall further without the infusion of cash,” Kates says.

This makes even downsizing a problem later in life.

"It is not unusual for parents to sacrifice for their children, even to the point of disadvantaging themselves."

To put this in perspective, the Wells Fargo survey found that an astounding  56% of parents who provide help say that support is straining their own finances. 

Bobbi Rebell, CFP, consumer finance expert at BadCredit.org, says that parents need to tread carefully and balance support for the next generation while looking out for their own future.

“They need to remember that any support to their young adult kids needs to be in line with their own retirement and long-term goals,” she advises. “It is hard because there is that emotional parental pull, but if you think it is hard to say no now, think how hard it will be to ask the kids for help in the future. “

To that end, the Veterans United survey found that 35% of parents are tapping into their own equity to help their kids.

Veterans United Home Loans’ Birk says that doing this through a HELOC or cash-out refinance can be an effective way to access relatively low-cost funds.

“A HELOC offers flexibility to draw funds as needed, while a cash-out refinance provides a lump sum and can simplify payments into a single mortgage,” Birk says, adding, however, that both come with meaningful risks, in part because the parents’ home is used as collateral.

“HELOCs often carry variable rates that can increase over time. Cash-out refinances can also raise a homeowner’s overall loan balance or replace a low existing rate with a higher one, increasing long-term costs,” he adds.

The survey also found that 18% of parents help by cosigning mortgages, which Birk calls “ a powerful tool because it allows a younger buyer to qualify for a mortgage or secure better terms by leveraging a parent’s stronger credit, income, or lower debt levels.”

 Yet, there are risks here as well.

“The parent is equally financially responsible for the loan, meaning missed payments can damage their credit, increase their debt load, and potentially leave them on the hook for repayment,” Birk adds.

Cliff Auerswald, president of All Reverse Mortgage, says that parents and grandparents funding these down payment gifts are overwhelmingly house-rich and cash-poor, whether they help with a HELOC, a 401(k) or IRA withdrawal, or by selling investments.

“Pulling $50,000 from a traditional 401(k) is fully taxable as ordinary income and can push the parent into a higher bracket. Selling appreciated investments can trigger capital gains tax. None of these are bad options, but they all hit the parents' cash flow or carry tax consequences,” Auerswald says.

In the end, it’s key for parents to balance their own long-term needs while helping their children, to avoid jeopardizing their golden years.

While risks are notable, Ruthie Assouline, real estate agent at The Assouline Team at Douglas Elliman, says that when done thoughtfully, there can be advantages.

“Certain structures, such as gifting strategies or placing assets in a trust, can offer both financial and estate-planning benefits while helping the next generation enter the market sooner,” she says. “Hopefully, it becomes the gift that keeps on giving, so that 20 years from now, if we find ourselves in a similar housing environment, the next generation is in a position to extend that same opportunity and pass along the path to homeownership."