The American dream of homeownership is becoming increasingly dependent upon whether your parents have assets. A new analysis from Rocket Mortgage found that the share of homebuyers under 35 purchasing property with a co-applicant over 55 increased 21% between 2018 and 2025. Approximately one in 30 younger buyers now has an older co-applicant on the mortgage. Meanwhile, total home purchases among Americans under 35 have declined 15% over the same period. The cost of entering the housing market has increased so dramatically that family wealth is becoming a determining factor in who can purchase a home and who remains trapped renting.
We have reached the point where income alone tells us very little about a young person’s financial circumstances. Two people can earn identical salaries, have comparable education, and work equally hard, yet live in completely different economic realities. One has parents who own their home outright, investment accounts, perhaps a family trust, and enough accumulated assets to help with a down payment or guarantee a mortgage. The other comes from a family that has no accumulated wealth to transfer. The first individual can begin building equity immediately while the second spends years trying to save enough money to enter the market. The difference is not necessarily intelligence, ambition, or work ethic. It is access to assets accumulated by previous generations.
Rocket’s analysis found that approximately 3.3% of younger homebuyers purchased with a co-applicant over 55 in 2025. In Anaheim, California, where the median home price approaches $1 million, that figure was nearly 8%. Los Angeles, San Diego, South Florida, and New York also recorded elevated rates of older co-applicants. In comparatively affordable cities such as Milwaukee and St. Louis, the figures were closer to 2.3% and 2.4%, respectively.
Zillow’s 2026 Consumer Housing Trends Report found that 45% of Generation Z mortgage buyers used a gift or loan from family or friends to finance their down payment. Among millennials, the figure was 34%. A separate LendingTree survey found that 78% of Gen Z homeowners surveyed had received some form of financial assistance with the down payment on their current home, compared with 56% of millennials and just 12% of baby boomers.
The LendingTree findings are particularly interesting because 24% of Gen Z homeowners reported receiving down payment assistance through an inheritance or trust fund, while 27% received help directly from their parents. These are not enormous fortunes. A family that purchased a home thirty years ago, paid down its mortgage, and invested consistently may have accumulated enough equity to help its children. Another family may have inherited property from grandparents. Some parents are now purchasing homes outright for their adult children, while others are lending them money at rates below those available from banks. We are witnessing the transfer of accumulated assets becoming an increasingly important factor in determining the economic opportunities available to the next generation.
There is a substantial difference between income, assets, and net worth, and this distinction is becoming critical. Income is the money you earn. Assets are what you own or can access, while net worth is the value of those assets after subtracting liabilities. A young professional may have a high salary but relatively little accumulated wealth. Another young adult may earn substantially less yet have access to a family trust, inherited property, or parents willing to contribute $150,000 toward a home. On paper, the second individual may not personally possess a remarkable net worth. Economically, however, that person has access to capital that can change the entire trajectory of their financial life.
Parents are increasingly becoming the financial institution that makes homeownership possible. The National Association of Realtors reported that first-time buyers represented only 21% of home purchases during the year ending June 2025, the lowest share in its records dating back to 1981. The Urban Institute has also found that the number of young adults purchasing homes declined more than 26% between 2021 and 2024.
When parents become co-borrowers, they are assuming legal responsibility for the mortgage. If their child cannot make the payments, the lender can pursue the co-borrower. Depending upon the arrangement, their credit and borrowing capacity may also be affected. Parents who use retirement savings or borrow against their own homes to help their children could be placing their future financial security at risk. Family assistance may be beneficial when the assets are genuinely available, but borrowing against one generation’s retirement to finance another generation’s overpriced home can simply transfer financial vulnerability from the young to the old.
The financial structure of the economy has changed. A young adult with access to inherited property, a trust, or parental financial support can begin life with an entirely different set of opportunities from someone who must build everything from wages alone.
The American housing market is becoming an example of how capital accumulates across generations. Families that acquired property before the enormous inflation in asset prices are in a position to help their children purchase homes. Those without accumulated assets must compete in the same market using income that has not kept pace with the cost of ownership. There is nothing wrong with parents helping their children, and many have worked their entire lives to provide precisely that opportunity. The troubling development is that such assistance is becoming an increasingly important factor in whether young Americans can participate in homeownership at all.
We are watching the emergence of an economy in which family assets can matter more than individual earnings when determining who gets ahead. The next generation will not begin from the same financial starting line. Some will receive homes, down payments, trusts, or access to family capital, while others will inherit nothing and face decades of mortgage payments at prices previous generations could scarcely have imagined. The widening divide between those who possess assets and those who depend entirely upon wages will have lasting consequences for housing, family formation, consumer spending, and the broader economy. This is what happens when asset inflation outruns the productive economy for an entire generation.