Real Estate News

Parental co-ownership and the millennial home buyer question

Published: 20 Jan 2017

The home market is anticipating more millennial buyers. This generation may have suffered through the 2008 Recession but is now gaining the confidence and capital it could need to stay strong in the coming year and actually purchase new property. A Washington Post letter suggested one way that less secure millennials might still enter the market: help from their parents.

This does play into the stereotype of the recent college graduate still dependent on their relatives for money. However, depending on the situation, a parent could leave their home to their children as a way of sorting out inheritance issues. 

In response to a reader question, the Post's contributors said that adding a name to the title could benefit the parent and child, since the home itself is old and would likely not be worth anything on the market otherwise. The source also said that inheritance is usually less complicated than gifting a home, which can impact the decision to arrange it this way instead of through a gift, with the taxes that accompany it.

One thing's for sure: millennial presence in the housing market will continue to matter this year.  Last October, Zillow reported that the median age of the modern home buyer was 36, and that millennials made up 42 percent of buyers, 11 percent more than those in "Generation X" below them. In addition, 47 percent of millennial homeowners are in suburban areas, perhaps echoing similar patterns seen in earlier generations. 

The rush to purchase property shouldn't overshadow the need for suitable title insurance, though, especially if the ownership situation is difficult. When there's a significant property at risk, new owners should agree to this extra payment because it represents a possible huge relief later on, should legal fees be needed.