Rising home prices and increased mortgage interest rates have prompted more parents to assist their adult children with down payment funds, according to recent financial industry data and surveys.
A LendingTree survey of approximately 2,000 consumers conducted in March found that 40% of current homeowners received financial help with their home down payment in 2026, compared to 35% in 2023. The prevalence of such assistance is notably higher among younger age groups, with 78% of Gen Z homeowners and 56% of millennial homeowners reporting they received down payment support. Family members represent the primary source of this financial assistance, particularly for younger buyers entering the housing market.
Financial constraints are driving younger generations to delay major life decisions related to homeownership. According to a Northwestern Mutual study conducted in January that surveyed 4,375 U.S. adults, approximately 31% of Gen Z respondents and 24% of millennial respondents have postponed purchasing a home because of financial difficulties or concerns. Some financial advisors note that parental and grandparental assistance with down payments has become commonplace among first-time homebuyers who cannot independently afford the required funds.
Financial experts have outlined several tax-efficient strategies for parents considering down payment assistance. For 2026, individuals can gift up to $19,000 annually per recipient without triggering IRS reporting requirements, while married couples can combine their exclusions to $38,000 by filing a gift tax return. The federal lifetime gift and estate tax exemption stands at $15 million per person for 2026, meaning most families will not face tax implications even if annual gifts exceed the exclusion limits.
When planning gifting strategies, financial advisors recommend considering the types of assets involved and their tax implications. Different approaches—such as gifting during life versus passing assets through inheritance—can produce different capital gains tax outcomes depending on recipients’ income levels and the nature of the assets transferred.
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