One in 10 first-time buyers used an inheritance for a down payment

One in 10 first-time homebuyers used an inheritance for a down payment in the 12 months through June, a record share, the National Association of Realtors said in a report released Thursday.

A record 10% of first-time buyers paid all cash, and 28% of those transactions were backed by inheritance, according to the report. The median age of first-time buyers held at a record high of 40, and they accounted for 22% of purchases, close to a record low. A fourth used gifts or loans from family and friends.

For advisors, the split between gifts and loans is the live decision. A client putting money toward a child's down payment is choosing between an outright gift and a loan with a repayment schedule, and the typical first-time buyer in the NAR data is 40 — a homeowner carrying a mortgage, a title and, if the money was lent rather than given, an obligation that belongs somewhere in the family's planning.

Elevated home prices and mortgage rates have raised the financial hurdles to owning a home, particularly for younger Americans, Bloomberg reported. Repeat buyers, whose home values rose during the pandemic, remain the vast majority of purchasers.

Bloomberg News carried the report. Deal Tracker records two Bloomberg deals in the past 12 months, both as buyer, the latest announced July 29; Moves Wire records one departure in the same period, Peter Grauer's Sept. 15 move to Lear Investment Management as chair of its advisory board.

NAR's separate commercial real estate demand index ranked San Antonio ninth, as Private Wealth Daily previously reported.

Jessica Lautz, deputy chief economist at NAR, said in a statement: "The housing market is beginning to see a generational transfer of wealth. Because people are living longer, the generation receiving that wealth is no longer young adults."