The Equity in Your Home Could Be Your Child's First Home Opportunity

In conversations with clients lately, I keep hearing the same concern: their children want to buy a home, but saving up for a down payment feels nearly impossible. Mortgage rates are certainly a burden, but what many are realizing is that the bigger barrier is actually the upfront down payment.

Recent surveys confirm this — the number one reason first-time buyers are delaying their purchase is not the monthly payment, but the lack of initial funds. As home prices in Chicago and the suburbs have steadily climbed over the past few years, down payment amounts have naturally grown alongside them. In areas like Naperville, Schaumburg, Glenview, and Lincolnwood, even entry-level homes are priced in the $400,000–$600,000 range, meaning just 10% down requires a significant sum.

Yet there's something many homeowners are overlooking — the equity that has been quietly building in the home they already own.

What Is Equity?

Equity is the difference between your home's current market value and your remaining mortgage balance. With home prices rising and principal being paid down simultaneously over the past several years, many homeowners now hold far more in home equity than they realize.

This is especially true for those who purchased before 2018, or who refinanced during the low-rate period of 2020–2021. This is not just a number sitting on paper — it is an asset that can be strategically put to work.

Why This Conversation Matters Right Now

Following the Fed's recent rate policy shifts, the mortgage market is gradually stabilizing. However, lower rates do not eliminate the down payment challenge. For buyers, that upfront cost remains the single biggest hurdle.

A significant share of first-time buyers are already relying on family assistance to cover their down payment. This is no longer an exception — it is becoming the norm.

Looking ahead, a massive intergenerational wealth transfer is projected to unfold over the coming decades. Rather than waiting for inheritance, strategically utilizing assets during one's lifetime is becoming increasingly important.

Practical Ways to Use Your Equity

The idea is not to liquidate everything, but to put a portion to work. Some realistic approaches include a cash gift to cover part of the down payment, a private loan between family members under agreed-upon terms, or transferring a portion of proceeds after selling the current home.

Of course, every decision must prioritize your own retirement plan and financial stability first. But the key point is that equity doesn't have to sit idle — it can be a tool that accelerates the next generation's path to building wealth.

This Is Not Just Financial Help — It's Transferring Opportunity

Owning a home is not simply about having a place to live. It is the starting point of wealth building — the moment when money that would have gone toward rent begins converting into an asset instead.

When a portion of the equity a parent has built helps their child purchase a first home, that is not just a financial gift. It is a decision that moves their wealth-building timeline forward by years.

The Chicago market remains structurally sound for the long term. Suburbs with strong school districts, conveniently located urban condos, and developing neighborhoods like the West Loop and Logan Square all carry meaningful potential for future appreciation.

Being strategic is far more powerful than waiting for the perfect moment.

What You Should Be Looking at Right Now

Start with the concrete numbers — your home's current market value, your remaining mortgage balance, your actual equity figure, the tax and gifting implications, and your child's realistic purchase price range. None of this is abstract. It all starts with a specific financial picture.

Now is the right time to revisit your family's asset strategy — before the rate environment shifts completely and market competition heats up again.

This is not a market for waiting. It's a market where the people who move with intention are the ones who capture opportunity.