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Where Are Young Buyers Relying on Older Co-Signers to Buy Homes?

Couple making a mortgage payment
fizkes / Shutterstock.com

Editor’s Note: This story originally appeared on Porch.

After two years of high competition and fast-rising prices in residential real estate, the market is at last seeing signs of cooling off.

While many buyers may be starting to feel relief, younger buyers have had an especially difficult time in this market and may continue to struggle. The Millennial generation — Americans aged 26 to 41 — are currently in their peak homebuying years, representing 43% of buyers according to recent data from the National Association of Realtors.

Because they are earlier in their working lives, young shoppers may have less saved up to put toward a home, and they also tend to be first-time buyers, which means they do not have existing home equity available to help finance a purchase.

To overcome these challenges, some young buyers have relied on older friends and family members with more financial resources to support a home purchase. Co-signers are people who agree to be responsible for loan payments if the primary signer defaults.

To determine the states with the highest percentage of young homebuyers with an older co-signer, researchers at Porch analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. The researchers ranked states by the percentage of young homebuyers (34 years old or younger) with an older co-signer (55 years old or older). In the event of a tie, the state with the higher median property value for young homebuyers with an older co-signer was ranked higher.

Following are the states where young buyers are most likely to rely on an older co-signer.

15. Illinois

Modern farmhouse
Hendrickson Photography / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 0.919%
  • Median property value for young buyers with an older co-signer: $225,000
  • Median property value across all young buyers: $245,000
  • Median down payment for young buyers with an older co-signer: $30,000
  • Median down payment across all young buyers: $20,000

14. New Mexico

Santa Fe, New Mexico
Sean Pavone / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 0.969%
  • Median property value for young buyers with an older co-signer: $215,000
  • Median property value across all young buyers: $215,000
  • Median down payment for young buyers with an older co-signer: $50,000
  • Median down payment across all young buyers: $30,000

13. Nebraska

Nebraska city scene
Katherine Welles / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 0.997%
  • Median property value for young buyers with an older co-signer: $195,000
  • Median property value across all young buyers: $205,000
  • Median down payment for young buyers with an older co-signer: $20,000
  • Median down payment across all young buyers: $20,000

12. Rhode Island

Home in Providence, Rhode Island
Laura Stone / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.002%
  • Median property value for young buyers with an older co-signer: $315,000
  • Median property value across all young buyers: $295,000
  • Median down payment for young buyers with an older co-signer: $50,000
  • Median down payment across all young buyers: $30,000

11. Massachusetts

Provincetown, Massachusetts
Lewis Stock Photography / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.018%
  • Median property value for young buyers with an older co-signer: $435,000
  • Median property value across all young buyers: $445,000
  • Median down payment for young buyers with an older co-signer: $70,000
  • Median down payment across all young buyers: $60,000

10. Oregon

Oregon rural home in the country
Rigucci / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.059%
  • Median property value for young buyers with an older co-signer: $365,000
  • Median property value across all young buyers: $385,000
  • Median down payment for young buyers with an older co-signer: $50,000
  • Median down payment across all young buyers: $40,000

9. New Jersey

Morristown, New Jersey
mandritoiu / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.079%
  • Median property value for young buyers with an older co-signer: $365,000
  • Median property value across all young buyers: $375,000
  • Median down payment for young buyers with an older co-signer: $60,000
  • Median down payment across all young buyers: $50,000

8. Vermont

House in Derby Line, Vermont, in fall
Richard Cavalleri / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.080%
  • Median property value for young buyers with an older co-signer: $215,000
  • Median property value across all young buyers: $265,000
  • Median down payment for young buyers with an older co-signer: $40,000
  • Median down payment across all young buyers: $30,000

7. Utah

House in 1991
Matthew Thomas Allen / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.081%
  • Median property value for young buyers with an older co-signer: $335,000
  • Median property value across all young buyers: $335,000
  • Median down payment for young buyers with an older co-signer: $40,000
  • Median down payment across all young buyers: $30,000

6. Nevada

MaxFX / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.159%
  • Median property value for young buyers with an older co-signer: $325,000
  • Median property value across all young buyers: $325,000
  • Median down payment for young buyers with an older co-signer: $50,000
  • Median down payment across all young buyers: $30,000

5. Montana

Missoula, Montana
Jon Bilous / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.176%
  • Median property value for young buyers with an older co-signer: $295,000
  • Median property value across all young buyers: $295,000
  • Median down payment for young buyers with an older co-signer: $50,000
  • Median down payment across all young buyers: $30,000

4. New York

Buffalo New York homes
Richard Cavalleri / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.317%
  • Median property value for young buyers with an older co-signer: $425,000
  • Median property value across all young buyers: $335,000
  • Median down payment for young buyers with an older co-signer: $70,000
  • Median down payment across all young buyers: $40,000

3. California

Homes in Sacramento, California
Emmy Bersa / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.358%
  • Median property value for young buyers with an older co-signer: $535,000
  • Median property value across all young buyers: $545,000
  • Median down payment for young buyers with an older co-signer: $100,000
  • Median down payment across all young buyers: $100,000

2. Colorado

Centennial, Colorado
Faina Gurevich / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.361%
  • Median property value for young buyers with an older co-signer: $385,000
  • Median property value across all young buyers: $405,000
  • Median down payment for young buyers with an older co-signer: $60,000
  • Median down payment across all young buyers: $50,000

1. Hawaii

1960s home interior in Hawaii
jr.gardiner / Shutterstock.com
  • Percentage of young buyers with an older co-signer: 1.752%
  • Median property value for young buyers with an older co-signer: $545,000
  • Median property value across all young buyers: $555,000
  • Median down payment for young buyers with an older co-signer: $100,000
  • Median down payment across all young buyers: $80,000

Methodology

Man analyzing data on a laptop
fizkes / Shutterstock.com

To determine the states with the highest percentage of young homebuyers with an older co-signer, researchers at Porch analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. Only conventional, non-commercial, home purchase loans that originated in 2020 were considered in the analysis.

Additionally, data on median home values are from Zillow’s Zillow Home Value Index. The researchers ranked states by the percentage of young homebuyers (34 years old or younger) with an older co-signer (55 years old or older).

Researchers also calculated the median property value for young homebuyers with an older co-signer, median property value across all young homebuyers, median down payment for young homebuyers with an older co-signer, and median down payment across all young homebuyers. In the event of a tie, the state with the higher median property value for young homebuyers with an older co-signer was ranked higher.

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