Generational Wealth Transfer and Home Buying: How Maricopa County Families Are Helping Their Kids Buy Homes

As the cost of homeownership continues to rise, more families in Maricopa County are turning to a time-honored tradition of generational wealth transfer to help their children secure a piece of the American Dream. With median home prices in cities like Scottsdale, Mesa, and Glendale soaring, many first-time homebuyers are struggling to afford the down payments or meet the requirements for securing a mortgage on their own. In response, parents and grandparents are stepping in to provide financial assistance, enabling younger generations to purchase homes in an increasingly competitive market.

Supporting First-Time Buyers : Down Payments, Mortgages, and Financial Gifts

One of the most common ways Maricopa County families are helping their children purchase homes is through down payment assistance. With home prices continuing to climb, especially in areas like Gilbert and Chandler, many first-time buyers are unable to come up with the typical 20% down payment required by traditional lenders.

Parental Support : Parents are often gifting their children the funds needed for a down payment or acting as co-signers on mortgages. According to recent data from the National Association of Realtors, nearly 30% of first-time homebuyers received help with their down payments from family members in 2023. In Maricopa County, this trend has only intensified as home prices have skyrocketed in the past few years.

Mortgage Guarantees : Some families are guaranteeing their children's mortgage loans, offering an additional layer of security for lenders. This arrangement helps the children qualify for loans with more favorable terms, even if they don’t have a significant credit history or the necessary income.

" The financial support from family members isn’t just about helping buyers; it’s also a way to invest in the future of their families, ensuring that wealth stays within the family while also helping younger generations build long-term equity, " says Laura Horton, a local real estate agent in Phoenix.

The Impact of Rising Home Prices on Young Buyers

As the Phoenix metropolitan area has seen some of the fastest-growing home prices in the country, first-time homebuyers are facing immense challenges in affording their first homes. In areas like Tempe, Paradise Valley, and North Phoenix, median home prices have jumped by more than 50% in the past five years.

Scottsdale saw its median home price surge to over $900,000 in 2024, making it nearly impossible for the average young buyer to afford a home without financial assistance.

Tempe has seen its home prices increase by 15% annually for the last few years, with young buyers increasingly turning to their families for help with securing homes.

This surge in home prices has led many families to re-evaluate how they can invest in their children’s futures through homeownership. With higher property values, families are finding that their equity in their own homes can be put to use in supporting the next generation’s real estate aspirations.

Cultural Shifts in Homeownership

The tradition of homeownership has always been seen as a key step in achieving financial independence, but the path to owning a home is becoming increasingly difficult for younger generations. As the Millennial and Gen Z generations enter the housing market, they’re faced with the dual challenge of rising home prices and stagnant wages.

According to Arizona State University’s W.P. Carey School of Business, millennials now represent the largest share of homebuyers in the state, and nearly 50% of these buyers are relying on family assistance in some form. This represents a cultural shift in how wealth is being passed down from generation to generation.

As Maricopa County continues to be a hotspot for relocation, with a growing influx of people from California and other states, the demand for homes is only expected to increase, which will place even more pressure on home prices and force families to become more involved in supporting their children’s homeownership dreams.

Conclusion: A New Era in Wealth Transfer and Homeownership

The growing trend of generational wealth transfer in Maricopa County signals a shift in how families approach both real estate and long-term wealth building. As home prices continue to climb, we can expect this trend to continue, reshaping the housing market for future generations.

Sources:

• National Association of Realtors (2023). "Generational Shifts in Homeownership: Down Payments, Co-signing, and Financial Gifts."
• Arizona State University, W.P. Carey School of Business (2024). "Millennials and Homeownership Trends in Arizona."