Intergenerational Homeownership
October 6th, 2020
As a HUD approved agency, we help our clients with many aspects of homeownership, from helping them get out of debt to building their credit and saving for a down payment. When deciding to buy a home, they do so for many reasons; to have a place of their own, to build wealth, essentially to take part in the American dream. In the Urban Institutes study, Intergenerational Homeownership noted below mentions that owning a home is one of the greatest wealth transfers for the majority of Americans.
From Urban Institute website:
“This study examines the impact of parents’ homeownership and wealth on the homebuying prospects of their children between 1999 and 2015. We focus on young adults ages 18 to 34, who are likely to be first-time homebuyers and have fewer financial resources. We find that having a homeowning parent increases a young adult’s likelihood of being a homeowner by 7 to 8 percentage points. Additionally, a 10 percent increase in parental wealth increases a young adult’s likelihood of owning by 0.15 to 0.2 percentage points. For example, if parental wealth is $200,000, the young adult would have a 50 percent likelihood of owning a home. If parental wealth is $260,000 instead and all other factors are the same, the young adult’s homeownership propensity is 54.5 to 56.0 percent. Parental wealth includes financial assets and nonfinancial assets, such as homes and automobiles, minus any debt. Parents’ tenure status and wealth explains 12 to 13 percent of the difference in homeownership between black and white young adults.”
When coaching clients we focus on their individual needs and goals. We work alongside our clients and their families through the process to help achieve their long-term goals.