During the housing bubble, many young people wrote off buying property as an expensive preoccupation of their parents’ generation, accessible only to the rich.
Now that property values have tumbled and taken interest rates along with them, many parents are pushing their children to jump into the housing market, local Realtors say. What’s more, those parents appear more willing than ever to contribute some of their hard-earned savings to do it.
“From my experience, the more real estate opportunities have grown, the more parents are being aggressive in urging their kids to make a move and assisting in the reality of home ownership,” said agent Dee Southerland, who specializes in representing first-time homebuyers at Williams & Stuart Real Estate in Cranston. “And in general, the younger the buyer, the more parental involvement there is.”
Of all the sales involving first-time buyers, Southerland estimates at least a quarter involve a significant contribution from family members toward a down payment or closing costs.
“The parents see an opportunity, and that this is the best way they can help their kids,” Southerland said.
According to many in the real estate world, low prices are just one reason the generations are teaming up to get younger members on the property ladder.
While interest rates are at historic lows, lenders have made securing a mortgage more difficult than before the bubble burst, putting a premium on having the down payment and upfront costs paid for to take advantage of good deals.
And with double-digit statewide unemployment coming out of the recession, many young people have already had credit-killing financial problems that make it even more difficult to get a loan on their own.
“A lot of parents are getting involved, and I would say more so in the last couple of years than before,” said Victoria Doran of Coldwell Banker Residential Brokerage in Providence. “One example is a woman whose daughter had just had a short sale, so she would never qualify. So her mother is buying the house.”