NEW YORK — A growing number of American parents are helping their adult children achieve homeownership, providing money for down payments, mortgage expenses and other housing costs as high property prices make buying a home increasingly difficult for younger generations.
But financial experts are warning that the growing dependence on family wealth could introduce serious risks for parents who provide assistance without carefully considering their own retirement savings, taxes and long-term financial obligations.
The trend, widely described as the “Bank of Mom and Dad,” has become an increasingly important part of the American housing market.
Research published in 2026 suggests that parental assistance is no longer an unusual advantage enjoyed by a small number of homebuyers.
For many young adults, it is becoming an important factor in determining whether they can purchase a property at all.
Yet behind the growing willingness of parents to help lies a complicated financial question: How much support can families provide without jeopardizing their own economic security?
74% OF PARENTS CONSIDER HELPING THEIR CHILDREN BUY HOMES
Research from Northwestern Mutual’s 2026 Planning & Progress Study found that 74% of surveyed parents with children at home would consider financially assisting their children with a future home purchase or had already begun planning to do so.
The study surveyed more than 4,000 adults and highlighted the growing importance families place on helping younger generations enter the property market.
Among parents considering this support, 29% said helping their children buy a home was more important than contributing toward college expenses.
Another 55% viewed homebuying assistance as equally important as educational support.
The findings demonstrate how homeownership has evolved into a major family financial priority.
Instead of waiting until they die to transfer wealth to their children, some parents are considering providing assistance during their lifetime.
The goal is often to help younger family members begin building home equity sooner.
However, financial advisers caution that early wealth transfers should be considered alongside retirement needs, emergency reserves and other obligations.
FOUR IN TEN HOMEOWNERS RECEIVED HELP WITH THEIR DOWN PAYMENT
Additional research suggests that family support is becoming increasingly common.
According to a LendingTree survey cited by CNBC Select, 40% of homeowners reported receiving financial help with the down payment on their current home.
That represented an increase from 35% in 2023.
The generational differences were particularly striking.
Among surveyed Gen Z homeowners, 78% reported receiving assistance, compared with 56% of millennials and 12% of baby boomers.
These figures describe surveyed homeowners rather than all Americans within those age groups.
They nevertheless show how younger property owners are more likely to have relied on outside financial support.
The National Association of Realtors also reported that 22% of first-time homebuyers in its 2025 Profile of Home Buyers and Sellers used a gift or loan from friends or relatives toward their down payment.
The growing reliance on family assistance raises concerns about unequal access to homeownership.
Young adults whose parents have substantial savings, home equity or investments may be able to enter the market earlier.
Those without family resources may have to save longer or postpone purchasing property altogether.
PARENTS ARE CONTRIBUTING TENS OF THOUSANDS OF DOLLARS
The financial commitments can be substantial.
A 2026 Veterans United Home Loans survey found that many parents who had provided or planned to provide homebuying assistance expected to contribute between $25,000 and $49,999.
Nearly one-quarter expected to contribute between $50,000 and $99,999, while another group anticipated providing $100,000 or more.
The same research found that families were using several sources of money to finance this support.
These included bank accounts, investments, home equity and retirement savings.
Using accumulated savings may be manageable for some households.
However, borrowing against a family home or withdrawing retirement funds could create additional financial pressure.
Parents may face reduced investment income, larger borrowing obligations or diminished retirement reserves.
For financial advisers, the issue is not simply whether parents want to help.
It is whether they can provide that help without increasing their own risk of future financial hardship.
FINANCIAL EXPERTS WARN AGAINST SACRIFICING RETIREMENT SECURITY
One of the most important warnings concerns retirement planning.
Parents who use a substantial portion of their long-term savings to help their children purchase homes may have fewer resources available for medical expenses, housing, everyday living costs and emergencies later in life.
This risk becomes particularly important for older parents approaching retirement.
Unlike younger homebuyers, retirees may have limited opportunities to rebuild depleted savings through future employment.
Fidelity Wealth Management advises families to consider their broader financial goals before making large gifts or loans to adult children.
Financial support can be beneficial when it is compatible with a family’s long-term plans.
But generosity should not create a situation in which parents eventually need financial assistance from the very children they intended to help.
Experts also recommend establishing clear expectations regarding whether the money is a gift or must eventually be repaid.
The distinction can become a source of conflict if family members have different understandings of the arrangement.
GIFT OR LOAN? THE DISTINCTION COULD CHANGE EVERYTHING
Parents generally have several ways to support an adult child’s home purchase.
One option is to give money directly toward the down payment or closing costs.
Another is to provide a documented family loan.
Parents may also consider cosigning a mortgage or purchasing property themselves and allowing their children to live there.
Each arrangement carries different responsibilities.
A genuine financial gift generally does not require repayment.
However, mortgage lenders may ask buyers to document the source of the funds and obtain a signed gift letter confirming that no repayment is expected.
A family loan creates a different situation.
If parents expect repayment, the obligation may affect the child’s debt-to-income ratio and mortgage qualification.
A loan should also have properly documented terms, including any applicable interest, repayment schedule and consequences of nonpayment.
Cosigning introduces another risk.
When parents cosign a mortgage, they may become legally responsible for the debt if their child fails to make payments.
That obligation could affect the parents’ borrowing capacity and credit standing.
Financial experts therefore urge families to evaluate the legal and financial consequences before choosing a method of assistance.
U.S. GIFT TAX RULES CAN CREATE UNEXPECTED PAPERWORK
Another major issue involves federal gift tax rules.
For 2026, the United States generally allows an individual to give up to $19,000 to any one recipient under the annual federal gift tax exclusion.
A married couple may generally combine their exclusions to give $38,000 to the same recipient, provided the applicable requirements are met.
However, exceeding the annual exclusion does not automatically mean the family must immediately pay gift tax.
Larger gifts may require the donor to file IRS Form 709 and may reduce the donor’s available lifetime gift and estate tax exemption.
The federal lifetime exemption is $15 million per individual in 2026.
Consequently, many families can make gifts larger than the annual exclusion without owing immediate federal gift tax, although reporting obligations may still apply.
State-level taxes and other estate-planning considerations can complicate the situation.
Financial advisers recommend consulting qualified tax professionals before transferring large amounts of money or real estate.
Families should also avoid describing money as a nonrepayable gift to a mortgage lender when the actual arrangement requires repayment.
Accurate documentation is essential.
BARRON’S: FAMILY HOME LOANS REQUIRE CAREFUL PLANNING
Barron’s reported in July 2026 that parents have several options for supporting younger homebuyers, including direct gifts, family loans, mortgage cosigning and purchasing property for their children.
The publication emphasized the potential problems associated with informal arrangements.
When a parent lends money without clear repayment terms, disagreements can emerge if the child experiences unemployment, financial difficulties or changes in family circumstances.
The situation may become especially complicated when parents eventually need the money for their own retirement.
An informal loan can also raise difficult questions about how to treat financial assistance given to siblings.
For example, parents who give one child a substantial amount toward a home purchase may need to decide whether to provide equivalent help to their other children.
Transparent communication and written agreements can reduce the likelihood of disputes.
Financial arrangements that appear simple at the beginning may become complicated as families and circumstances change.
THE NATIONAL ASSOCIATION OF REALTORS WARNS ABOUT HIDDEN COSTS
Receiving enough money for a down payment does not automatically make a property affordable.
The National Association of Realtors warns that buyers must also consider the ongoing costs of homeownership.
These expenses may include mortgage payments, property taxes, homeowners insurance, utilities, maintenance, homeowners association dues and unexpected repairs.
Some buyers may also have to pay mortgage insurance, depending on the loan structure and the size of the down payment.
A 2026 study cited by NAR found that recent buyers faced average upfront homebuying expenses of approximately $31,502, including repair, moving, closing and other transaction-related costs.
Families should therefore consider whether their children can afford the property after the initial purchase.
A generous down-payment gift may help someone qualify for a mortgage.
But it does not eliminate the possibility of financial hardship if monthly expenses consume too much of the household budget.
THE BANK OF MOM AND DAD COULD DEEPEN THE WEALTH GAP
The growing importance of parental assistance also raises broader questions about housing inequality.
Young adults with access to family wealth may purchase homes earlier, giving them additional years to accumulate equity.
Others may continue renting while saving for a down payment.
If property values rise over time, the difference in purchase timing can contribute to wider wealth disparities.
However, homeownership does not guarantee investment gains.
Property prices can decline, maintenance expenses can be substantial and selling a home may involve significant transaction costs.
The growing role of family support therefore reflects both the potential advantages of intergenerational wealth transfers and the challenges faced by households without access to substantial parental resources.
The trend has implications for housing affordability, financial independence and long-term wealth creation.
WHAT THIS MEANS FOR FILIPINO FAMILIES
Although the research focuses on the United States, the issue is relevant to many Filipino families considering how to help younger relatives purchase their first homes.
Parents may provide financial assistance toward condominium units, residential lots, housing loans or other property purchases.
However, the U.S. statistics and tax rules cited in these studies do not automatically apply to the Philippines.
Philippine families must consider local property laws, applicable donor’s tax requirements, documentary taxes, transfer expenses and the specific policies of banks or housing lenders.
For parents, the financial planning questions remain similar.
Can they afford the gift without compromising retirement savings?
Will the child be able to manage monthly payments and property maintenance?
Is the financial support intended as a gift, a loan or an advance against a future inheritance?
Clear agreements can help avoid misunderstandings, particularly when multiple family members are involved.
THE BIGGER QUESTION: WHEN DOES HELPING BECOME TOO EXPENSIVE?
The rise of the Bank of Mom and Dad shows how homeownership is increasingly becoming a family financial decision rather than a milestone achieved entirely through individual savings.
For young adults, parental assistance can create opportunities that might otherwise remain out of reach.
For parents, helping a child purchase a home can be a meaningful way to transfer wealth and support long-term financial independence.
But the decision also involves risks.
A large gift could weaken retirement security.
A poorly structured family loan could lead to repayment disputes.
Cosigning a mortgage could expose parents to substantial debt obligations.
And buying a property that the child cannot independently afford could turn an act of generosity into a continuing financial burden.
Helping children purchase their first home may be one of the most valuable gifts parents can provide, but it should never come at the expense of their own financial survival.
As home prices continue to challenge younger generations, families face a difficult balancing act between supporting their children’s future and protecting their own.
The biggest question may not be whether parents can afford to help their children buy a home today, but whether they can still afford a comfortable retirement after doing so.
