After multiple rounds of stress tests and years of rising house prices, the timeframe required for a first-time purchaser to accumulate funds for a down payment has ballooned. Buyers earning the country’s average wage and hoping to save 20% of the average purchase price would have to spend 98 weeks saving every penny – more than double the time it would have taken them in 1990. Almost half of those aged 18 to 34 who haven’t bought a home yet said it’s because they need more time to save.
So what are would-be purchasers to do? Increasingly, they’re turning to family members: The share of first-time buyers relying on a gift from family has risen 23% since 2005, while the proportion turning to family for a loan climbed 3% in the same period. Buyers are also tapping into more avenues for the funds; nearly 20% said they relied on at least three sources to cobble together their down payment.
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