Dive Brief:
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Generous parents are increasingly helping an economic recovery that depends, in part, on the ability of young people to buy their first homes.
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The National Association of Realtors is releasing a survey in November that found 27% of first-time home buyers in 2013 used family money to make their down payments— up from 24% in 2012.
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Without financial help from relatives, those first-timers wouldn’t be able to afford homes. A July Federal Reserve report noted that 10% of apartment dwellers in 2013 wanted to own houses.
Dive Insight:
Lenders aren’t keen on applicants whose financial stability appears to depend on gifts, especially if the gift comes from the property’s seller rather than from a blood relative. Those borrowers defaulted on their loans at high rates during the recession.