Should You Let Your Kids Move in to Help Them Save for a Home?

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Saving for a down payment on a house can be a challenge, but if your kids live with you to cut their costs, it may be easier. Check out what to consider. 

Since 2018, the typical home buyer has put down between 6% and 7% as a down payment when purchasing a home, according to the National Association of Realtors. The median sales price for a home was $436,800 as of the first quarter of 2023, per the Federal Reserve of St. Louis. This means the buyer of a typical home would put down around $30,576 to get a mortgage loan and get into a property.

Some buyers need much more than that, especially if they would prefer to put down 20% to avoid private mortgage insurance (which protects lenders and adds to the buyer’s cost). Buyers in high cost of living areas will also need a bigger sum. And saving even $30,000 can be a challenge for many, so even those who don’t need more money may struggle to get a property of their own.

If you are a parent whose kids are trying to purchase a property, one possible option to help is to allow them to move back in with you to save on rent or housing costs so they can set aside more cash in a savings account for a down payment. But is this a good idea? Before you decide, be sure to ask yourself a few key questions.

How long would your child need to live with you to save a down payment?

The first big thing to think about is how long your child might need to live with you in order to save the necessary down payment to buy a house. A short-term arrangement may not be a big deal, but if it would take years to save enough, it could be more of an imposition on you and your own goals for your senior years.

Talk with your child about how much money they need to put down, how much they could actually save each month if they moved in with you, and what the timeline would be for saving up a down payment and moving forward with making an offer on a home.

Would your child contribute anything to the household expenses?

If the goal is for your child to move in to save money for a house, that means obviously they would want to keep their expenses as low as possible. But adding someone new to your household can add costs for you in the form of things like higher grocery and utility bills.

Consider what contributions, if any, you would expect your child to make to household expenses. Think about how that money affects their timeline for moving into a home of their own. And be sure you’re on the same page on this issue so there’s no resentment and so your own pocketbook doesn’t take a huge hit in a way that interferes with goals you have for yourself.

What would the “rules” be for shared living?

FInally, consider what living together would actually look like. If your child is thinking about buying a home, they are probably an adult already — so would you be able to accept them living under your roof but not being subject to any restrictions?

By addressing these issues, you and your child can come together to make the best choice about whether cohabitating for a while to enable your child to buy a house of their own is a wise decision for your relationship — and for both of your finances.

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