Nepo-Buyers Reshape the Housing Market

The situation in the American housing market has become quite challenging, particularly for first-time buyers, pushing them to turn to their parents for financial assistance.

These “Nepo-Buyers” refer to adult children who are leaning on family resources—whether that’s down payments, co-signed mortgages, or even outright gifts of property—to enter the market.

Lucy Asline from Douglas Elliman noted, “Home prices, interest rates, insurance—everything is skyrocketing. Without extra help, being a first-time buyer is getting increasingly tough.” She found that almost every client they worked with had some form of parental support.

In fact, Asline’s team has observed a notable trend: many parents are stepping up to help their children navigate the difficult real estate landscape, giving them a fighting chance in a very competitive market.

Typically, home buyers might consider the 30% rule—keeping mortgage payments to 30% or less of their monthly income. However, a recent report from Realtor.com indicated that just three metro areas in the U.S. have homes affordable enough for median-income households to stick to this guideline.

Moreover, the National Association of Realtors reveals that the median age for first-time home buyers has now reached 38. A Redfin study from 2023 also highlighted that 38% of home buyers under 30 relied on cash gifts or inheritances for their down payments.

Purchases backed by parents play a significant role in supporting the U.S. housing market, especially at entry-level price points that have seen considerable deceleration.

Assouline mentioned that they frequently work with empty nesters who are established in their careers and financially stable. Conversations often revolve around how parents can help their adult children achieve their homeownership goals and set realistic expectations about what to expect in the market.

“It might be a down payment, or potentially the entire purchase price,” she elaborated.

Focusing mainly on New York City and Miami, Assouline sees the advantages of parental support. She stated, “People are generally more cautious about their spending as they approach home buying.”

“The involvement of parents… empowers their children to make informed decisions and ensure they do their homework, working with brokers to guide them,” Assouline said.

“This not only helps build personal equity but also secures a safe space in a chaotic world.”

“This is your opportunity to lay the groundwork for your future. In 20 years, when another housing crisis hits, you could be the Nepo-buyer,” Asline suggested.

Of course, some drawbacks exist for Nepo-Buyers, such as co-ops that may restrict parental contributions and the possibility of family discord.

“In these co-ops, whether parents can help with a purchase can vary by building. Some allow it, while others do not,” the real estate expert explained.

“And when receiving help from family, it sometimes comes with strings attached,” Assouline cautioned. “It really depends on personal circumstances.”

Regardless of whether one identifies as a Nepo-buyer, Assouline is optimistic about the increase in housing inventory across the country, which could mean new opportunities for first-time buyers who haven’t had many options in years.

“Buyers now have more negotiating power,” she remarked. “Sellers are more open to serious discussions… For those not relying on parental help, this is a great time to dive into the housing market. This could be your chance to build a future.”