Should You Move in With Your Parents to Save for a Home Down Payment?

Read this before you decide living with mom and dad is the way to go.

Housing has become very expensive in the United States. In fact, the Federal Reserve Bank of St. Louis reported the average sales price of a home in the fourth quarter of 2022 was $535,800. This means if you wanted to save up the recommended 20% down payment for a property so you could get an affordable mortgage without having to pay added costs of private mortgage insurance, you would need $107,160.

Saving up that much money may seem next to impossible unless you can dramatically cut costs. And, for some people, one way to do that is to move in with their parents. If your family will allow you to live rent-free or for a low amount of rent, you can put the extra cash you were spending on housing into a savings account for your down payment.

Before you do that, though, there are a few key things to consider.

How long will the arrangement last?

One of the first things to think about is how long you'll actually be living with your parents before you'll have the down payment needed to move forward with buying a home of your own. Assessing the timeline will help you and your parents decide if this is a situation you're all comfortable with.

You should make a budget based on what your housing costs would look like after moving in with mom and dad. Using this new budget, see how many months (or years) it will be before you have the down payment you need. With this information at your disposal, you can have an open conversation with your parents about how long you'd need the help.

Is everyone on the same page about key issues?

If you're considering moving in with your parents, you need to make sure everyone is in agreement on what cohabitation will look like. This includes you, your parents, as well as other family members such as your spouse or kids.

Think through every aspect of daily life and discuss those issues so there are no unpleasant surprises. For example, who will put groceries on their credit cards or cook meals or handle cleanup? Will you stay in your area of the house or will everyone live together? Will grandparents help out with the kids when you're cohabitating, and are they OK with the messiness your children might bring? How will pets be affected? Will you be expected to come home at a certain time?

The more people you're moving into your parents' home, and the longer it's been since you lived with your parents, the more of these issues need to be ironed out.

You don't want to ruin your relationship with your parents, your spouse, or anyone else in your family because you have different ideas about how living together will go. So be sure everyone is on board with your plans.

By addressing these issues, you can make sure that moving in is the right choice to help you fulfill your homeownership dreams without derailing your family life.