A new report from LendingTree shows Millennials need 50% more help when it comes to down payment assistance compared with the national average. Most of that assistance is coming from equity in properties owned by relatives.
“The large share of millennials receiving down payment help highlights the importance of intergenerational wealth transfers,” said Tendayi Kapfidze, LendingTree’s chief economist. “Much of the down payment assistance comes from accumulated equity from homes owned by older generations.”
The LendingTree report said 59% of millennial homebuyers are receiving help with their mortgage down payment. That compares with about 4 in 10 homebuyers of all ages relying on help from family members, friends, employers or a down payment assistance program to get a mortgage for their home purchase.
The report, based on a survey of over 1,000 homebuyers about their down payment plans, also shows nearly a third (31%) of homebuyers plan to contribute at least a 20% down payment. Baby boomers are the age group most likely — at 56% — to put down 20% or more. By contrast, only 29% of Gen Xers and 22% of millennials plan to spend as much on their down payment. About 1 in 5 (21%) first-time buyers plan to put down 5% to 9% of their home’s purchase price, while 22% of repeat buyers plan to put down 10% to 14%.
Education appears to be a service loan originators could offer their clients. LendingTree’s report says four in 10 homebuyers have “very little to no knowledge” of the mortgage lending process. However, 44% of buyers say they know a lot — but not everything — about getting a mortgage. Another 17% say they know everything there is to know about the topic.