The dream of homeownership is part of the fabric of America, and while many experts agree it’s a sure way to build wealth, for younger Americans, achieving the dream has recently proven difficult.
Inflation and enormous student debt are taking their toll, to say nothing of stubborn mortgage rates. After a brief tickdown, they are increasing again, due to geopolitical uncertainties. The 30-year fixed-rate mortgage jumped to 6.11% as of March 12, according to Freddie Mac.
To that end, it’s no wonder that the true age of first-time homebuyers these days is higher than ever, creating a barrier for the next generations’ financial goals.
Now, more than ever, parents are jumping in to help their kids. But interestingly, they’re shifting their priorities, valuing real estate above higher education.
The new Northwestern Mutual 2026 Planning and Progress study found that a whopping 74% of parents with children at home say “they’d consider or are already planning to help a child buy a home.”
And among those parents, “29% say helping with a home purchase is more important than helping pay for college.”
The recently released Realtor.com® generational wealth report found that purchasing a home by age 30 is associated with a 22.5% higher net worth ($119,000) at age 50 than buying in one’s 40s, highlighting how a longer accumulation window compounds financial security.
Northwestern Mutual adviser Nisu Patel notes that this may be why down payments for homes are becoming the new college fund.
“This doesn’t mean parents necessarily value education less. Rather, it reflects the reality that many young adults can access loans or scholarships for college, but breaking into the housing market often requires upfront capital that a lot of young adults don’t have just yet,” Patel says.
Bobbi Rebell, CFP, consumer finance expert at CardRates.com, and her husband are among these parents.
Rebell says that they supported their daughter’s desire to be a homeowner.
“She wanted that security,” Rebell says. While they did not directly give her cash for a home down payment, they allowed her to live in their home and covered her living expenses for a couple of years while she saved up to buy her first home.
“Being a homeowner has helped her mature into a financial grownup and have a unique level of confidence that I don’t think she would have if she weren’t a homeowner. It is a responsibility that can be an important milestone for some as they grow into adulthood,” Rebell says.
That said, Rebell also notes that she was surprised that close to 30% of parents prioritized the home purchase over education.
“My guess is that they feel the kids can get scholarships and loans to cover education, but a down payment is something that may be tougher to build on their own,” she says.
Stephen Kates, CFP, a Bankrate financial analyst, says there has been a gradual shift away from the mindset in the early- and mid-2000s that everyone must obtain a college degree.
Recent high levels of student debt, the growing presence of artificial intelligence in the workplace, and persistent shortages of skilled tradespeople have led many parents and students to question whether higher education offers the same value it once did.
“For many families, weighing the costs and benefits of a college degree has become more complicated,” Kates says.
Andrew Latham, CFP, director of content and financial planning at SuperMoney.com, adds that he understands the “logic” behind the shift.
While the right education is still one of the best investments out there, “if we’re talking about handing a kid $100,000 for a down payment on a rental property or a house-hack duplex, that’s a wealth-building move most degrees aren’t going to match,” Latham adds.
Mike Ognissanti, branch manager for Churchill Mortgage, says that more parents have started to recognize that if they can help with a down payment, it can completely change their child’s financial trajectory in life.
“Helping them buy a home earlier can allow them to start building equity and wealth sooner, so it’s really about giving the next generation a stronger financial foundation,” Ognissanti says.
In truth, parents who can give their kids a leg up may be more vital than ever.
“The current sense of unease rippling through the housing market feels strikingly familiar, echoing the tariff-driven volatility that upended financial markets this time last year,” Realtor.com senior economic research analyst Hannah Jones said in the generational wealth report.
From a market standpoint, this signals continued demand at entry-level price points, says Ognissanti, adding that first-time buyers are the foundation of the entire housing ladder.
“When they’re able to step into homeownership, it creates movement all the way up the chain—move-up buyers can sell, sellers can make their next move, and the whole market becomes healthier,” he adds.
What’s encouraging right now is that more families are starting to view homeownership as part of their long-term financial planning, he says.
On the other hand, Latham says he’s seeing families get creative: parents co-signing, making interest-free family loans, or straight-up buying a property and renting it to their kid below market until the kid can refinance into their own mortgage.
“The big unknown is still rates. A $300,000 mortgage at 7% runs you about $600 more per month than the same loan at 3.5%. A down payment gift from mom and dad doesn’t always close that gap,” he says.
Bankrate’s Kates notes that there is no shortage of account options available to parents today. The challenge is aligning the right account with the family’s long-term goals. More choices also mean more trade-offs.
He says that 529 plans remain one of the most effective tools for education savings. And if funds remain after a child finishes school, a portion can potentially be converted into a Roth IRA under current rules.
In addition, Kates says that for families seeking maximum flexibility, saving through a taxable brokerage account in either the parents or the child’s name can provide broader access to funds. Still, the trade-off is that this approach is generally less tax-efficient.
“Parents should not expect to optimize every decision perfectly when planning for an uncertain future that may be a decade or two away. There is no universal best way to save. The most important step in helping children gain a financial leg up is simply getting started,” he says.
And finally, Patel says that for families with the means, helping a child purchase a home can be one of the most meaningful ways to support their long-term financial stability.
Yet, he also stresses that there isn’t a one-size-fits-all answer: Multiple routes exist. Finding the right approach for your family’s situation can make all the difference between delaying homeownership for years and getting those keys much sooner, he says.
He also underscores another important point for parents: They should balance that support with their own financial goals, such as retirement planning, so that helping the next generation doesn’t come at the expense of their own financial security.