Home and rent prices in the United States have increased 73 percent and 61 percent, respectively, since 2000. But incomes for millennials haven't matched that: They've increased only 31 percent in the same time frame.
As a result, young people "face a housing market where rent and home prices have risen faster than incomes for decades," real-estate website Apartment List reports, and in order to keep up with those rising prices, "many millennials receive financial support from families."
Apartment List conducted a survey of more than 13,000 millennials to determine how many receive regular help from family with rent or a down payment, as well as how much assistance they receive. According to the findings, about 8 percent of non-student millennials receive money from family members in order to pay rent each month, and "while most of these renters receive relatively small sums each month, one in three receive rent in full from their parents."
Another 15 percent still live with their parents to cut costs. And, since not everyone can get or will take support, one in four millennials ends up spending more than half their income on rent.
Apartment List points out that assistance comes in different forms, too, since "40 percent of millennials receive help from parents with everyday expenses, including rent, child care, phone bills and car payments. An even larger share likely receive one-time help, such as help with a down payment, moving costs or money after losing a job."
When it comes to a down payment on a home, 17 percent of millennials expect financial help from family and, of those, one in three expect to have at least 30 percent of their payment covered. The finding makes sense: Saving for a down payment can take 20 years in some metro areas. In Los Angeles, for example, renters anticipate needing $36,340 to cover a down payment. A 20 percent down payment on the average condo costs more than twice that, reports Apartment List.
Of respondents who receive rent assistance, some are unemployed but many work service jobs as receptionists, nurses, teachers and cashiers. Even college-educated millennials, who tend to earn higher incomes, can struggle to save thanks to theburden of student loans.
And the problem of housing costs plagues even older renters: "With sky-high rents in many cities," notes Apartment List, "2 percent of renters over 40 receive help from mom and dad."
While family can provide a safety net for financial troubles, such as sudden unemployment or an unexpected medical expense, it can become problematic if it turns into financial dependency. It can also give rich kids an unfair advantage, the site notes, since "although renters from a lower-income background are more likely to need assistance, they are less likely to have parents who can support them, reinforcing existing wealth inequality."
If you're looking to save on rent, mortgage or put a down payment on a home, check out these budgeting hacks, credit card tips and ways to save on an apartment or a house.
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Video by Mary Stevens and Zack Guzman
