Millennial and Gen Z ‘nepo-homebuyers’ are about to flood the housing market

Landlord unlocks the house key for new home

Nepo babies abound on theater stages and movie screens. But there may soon be a new form of nepotism living right next door.

“Nepo-homebuyers,” or young people who use cash gifts from their family to fund the purchase of a new home, are becoming more and more popular, according to a new survey commissioned by real estate brokerage Redfin.

Some 36% of Gen Zers and millennials who are planning to buy a home soon said they expect to use cash gifts from family to help finance their down payment. That’s double the number of young Americans who said they would use a cash gift to help fund a home purchase back in 2019. (That survey only looked at millennials, whereas the real estate company surveyed both millennials and Gen Z in 2024.)

“Nepo-homebuyers have a growing advantage over first-generation homebuyers,” Redfin chief economist Daryl Fairweather said in the report. “Because housing costs have soared so much, many young adults with family money get help from Mom and Dad even when they have jobs and earn a perfectly respectable income. The bigger problem is that young Americans who don’t have family money are often shut out of homeownership.”

The survey found that the biggest barrier to homeownership is affordability — a disparity that has only been exacerbated by the post-pandemic economy. Home prices in the U.S. have risen almost 40% from 2019 levels, booking a 7% increase in 2023 alone, according to Redfin.

Low housing inventory and persistently high mortgage rates are only further complicating an already-difficult market. With just 1.4 million houses for sale as of February and an average 30-year-fixed mortgage rate approaching 7%, many prospective homebuyers are staying put, at least for now.

Cash gifts aren’t the only way young Americans are relying on their families in the increasingly hostile housing market. About one in six Gen Zers and millennials surveyed, or 16%, said they’ll use an inheritance to help fund their down payment, while 13% said they plan to live with parents or other family members.

Fairweather said that those who “don’t have a pot of family money to dip into” are at a disadvantage, which continues to drive wealth inequality and prevents young people from gaining economic ground on peers with more privileged backgrounds.

“The American Dream is just as much about class mobility as it is the home with a white-picket fence,” he said, “and the housing affordability crisis has made both elements of the dream harder to attain.”

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