Moving Back Home to Save for a House: How to Make It Work

After starting a career in engineering in Boynton Beach, Florida, Moisey Abdurakhmanov was renting a home with friends when he decided he wanted his own place.

"I realized I was basically paying somebody else's mortgage every month," he recalls.

So when the lease was up, he moved back home with his parents, saved every dime he could and bought a house five months later in January 2021 — "easily one of the best decisions I've made."

Many millennials are taking a similar path to homeownership. About a quarter (24%) of people ages 25 to 33 who bought a home between July 2022 and June 2023 said they moved in directly from a family member's home, according to a National Association of Realtors' survey. Last year 29% of people who planned to buy a home in the next 12 months had already moved in with their parents to save money, and another 22% said they'd consider doing so, according to a May 2023 survey by Realtor.com and Censuswide.

With high housing prices and rising mortgage rates, you might think saving for a house will take ages. Moving in with parents can speed up the process and eliminate the headache of synchronizing a home purchase with the end of a rental lease.

But the strategy comes with challenges, no matter how much you like your folks. Here's how to make it work.

Clarify your savings goals

Before broaching the idea, research the market where you plan to buy, figure out how much home you can afford and set a savings goal.

The two biggest upfront expenses are the down payment and closing costs. Minimum down payment requirements vary by mortgage type. Some conventional loans have minimum down payments as low as 3%, but the more you put down, the less your monthly payments will be. Closing costs range from about 2% to 6% of the loan amount.

Consider taking a first-time home buyer's class to learn about the process, and consult with a lender or two. When you're ready to shop for a home, you'll want to get preapproved for a mortgage. When you're still months away from house hunting, apply for pre-qualification — a less intense process — to see how much you may be able to borrow and what your monthly payments might be.

Then set a time frame. How long will it take to reach your goal if you move back home?