This factor may determine whether you get rich. You don't control it.

Homeownership has long been seen as a cornerstone of the American Dream because it reliably builds wealth. But new research suggests your chances of ever acquiring a home may depend partly on something beyond your control: your parents' wealth.

To examine the factors that influence what economists refer to as "wealth mobility," researchers from the U.S. Census Bureau and Carnegie Mellon University analyzed IRS tax records, Census data and property ownership records for 3.4 million families.

The analysis then tracked the children born to those families — kids born between 1978 and 1986, or the youngest Gen Xers and youngest millennials — and whether they were able to buy a home between 2019 and 2021, when they were between 34 and 42 years old.

The bank of mom and dad

A key finding was that homeownership depends more on parental wealth than adult income, especially in expensive housing markets. Even people who significantly increase their income over their careers are less likely to own a home if their parents were renters than those with homeowner parents.

"Even if children grow up to earn about the same amount as adults, those with wealthier parents have higher homeownership rates and more valuable homes when they do own homes," Max Risch, one of the paper's co-authors and an economist at Carnegie Mellon University, told CBS News.

He added, "The opportunity to achieve this American dream is more dependent on how wealthy your parents are than we might like."

Economists have long focused on income mobility, including influential work by Harvard economist Raj Chetty, but wealth mobility has received less attention, Risch said. The new research suggests income mobility alone does not fully explain economic outcomes because wealth — which tends to persist across generations — shapes opportunities in ways earnings alone may not.

The meaning of opportunity

The researchers didn't examine why children of homeowners are more likely to become property owners themselves. But parents who own homes may have greater financial flexibility to help with down payments or provide other resources, Risch said.

The wealth gap between homeowners and renters is sizable. Homeowners had a median net worth of $396,000 in 2022, versus $10,400 for renters, according to the Federal Reserve's most recent Survey of Consumer Finances.

Wealth can influence a family's ability to buy homes, pay for college or leave an inheritance. High income alone may not be enough, especially in expensive real estate markets, Risch said.

"When we think about opportunity, we should consider not only income and earnings, but the opportunity to purchase a home to build assets — maybe purchase the type of home that you wanted that gives you other opportunities to build wealth," he added.

Geographic tradeoffs

The study also looked at geographic differences in wealth mobility, finding that it's tougher for poor children to grow up to become homeowners in expensive U.S. regions, including parts of California and cities such as Boston, New York and Seattle.

Wealth mobility is strongest in parts of the Midwest and Southeast, where home prices are lower and inventory is higher, the new study found.

The findings suggest a tradeoff facing many Americans: move to pricier cities with stronger job markets and higher wages, or remain in lower-cost regions where homeownership is more attainable but professional opportunities may be more limited.

"These are pretty hard trade-offs," Risch said. "It might mean you have to live in a place that wasn't necessarily the place that you want to live — you have to rent for longer than you would like — to continue access to that income."

The surge in housing prices since 2021, after the study period, suggests parental wealth may become even more important for homeownership, Risch said.

Ray, you sure do have a knack for finding topics to get conversations going.

This looks to me like another research study that only looks at one piece of a topic, and not the big picture.

Certainly it is harder to buy a home in higher-priced areas. (pretty obvious without doing "research")

This article seems more like a list of symptoms/signs rather than the cause. Or, only part of what may be the cause.

My point is that having monetary wealth may not be the most important thing (certainly not the only thing) parents can give their children, to help them be successful in life. In this case, using home ownership as a measure of success.

Possession of money can often belong to people who also value a good education, are skilled at budgeting & a strong work ethic, etc. These same qualities can also be found in people without much money.

There are many wise people at all economic levels who teach their children core values that promote success. And there are many others in all economic levels who teach their children a whole other set of core values that lead them to not be successful / emulate what their parents have done.

How many of us here grew up with financially wealthy parents vs grew up poor?

I grew up solidly middle class. Mom was SAHM and Dad was a commissioned heavy equipment salesman. 4 kids. Dad quit college to marry Mom at 21 (she was 19.)

DH's parents were a nurse and a plant manager.

DH was an engineer early on by education and training, lived overseas for a decade before we met. I was a high-school dropout teenage mom who moved from MA to FL to VA to finally NC - living multiple places in each. We both entered tech in the middle 1980's and did well.

We became homeowners because that's what you did. You worked, you saved, you bought a house.

DJ, my parents started with nothing, attained some wealth, and then due to a not-their-fault accident lost everything and had to start over again. My father, with his 8th grade education and his great work ethic, was able to have 10 paid off single family homes when he passed away.

Yes, he helped us into our first homes, but all of us kids learned the value of money and hard work. As a result, we would have done well even without our parent's help. All of us children make more than my father ever did.

This same work ethic didn't necessarily pass down to my father's grandchildren. My dad was primarily self-employed and the family was his work force in his home maintenance and remodeling business. All of children got college educations and didn't work our children as hard and it shows up in that many of the grandchildren don't like to work hard especially manual labor.

When you see people like yourself achieve things it is much easier to see yourself in those same positions. That applies to education, profession or in this case home ownership.

In the past I worked with teens for many years. In

We're working on getting out of the WI market. We offered one tenant the opportunity to buy the house instead of moving. She went to classes, lined up resources, got approved for a grant to cover much of the down payment...but has since stalled. Why?

She's afraid. She would be a first-generation homeowner, and she's afraid. She's lived in the house for 7 years, knows every inch of it, and is still concerned that there might be some hidden issue that she doesn't know about.

Thus far I have only read the first sentence and I say, "hog wash".

I grew up with a single parent on welfare, and we moved all the dam time. Changed schools all the time, and thus couldn't keep up. Lived in a shelter home for a while. Wore hand me downs and sometimes went hungry till someone brought us food. There was no parental wealth in my parent or the means to get there. No family to speak of either. Lived sort of isolated. Wasn't allowed to go anywhere or hang out with friends. Paid for my own cap and gown from my own earned money for a graduation alone with no parents present. I bought my house on my own, with my own doing at 23. No research is going to tell 6x6 what can or can't be done. You do have control. Set a goal and strive for it every day.

So if they are looking at "wealth mobility" why did they look at IRS tax records, Census data and property ownership records? The world's largest research done on Millionaire's found that a very small percentage of millionaires came from a wealthy family or inherited money. The vast majority got their wealth through decades of investing in a 401K.

I’m a little late to the conversation, but I wanted to share how I got here.

My family came to the U.S. as refugees, and after my parents separated, I was raised by my single mom. We moved around often, and for a while our home was overcrowded. It wasn't just financially difficult—it also showed me how people shouldn't be treated, including some of our experiences with landlords.

Even as a kid, I remember thinking that if I ever had the opportunity, I wanted to do things differently. I wanted to treat people with the same respect and dignity that I wished my family had experienced.

In my late teens, I experienced homelessness. A few years later, I bought my first property on my own, without financial help from my parents, and over time I built a small real estate portfolio. My path wasn't traditional either—I left high school, earned my GED, eventually finished college, and worked multiple jobs along the way.

I also agree with those who mentioned living below your means. That mindset gave me momentum early on, and over time it compounded. Investing in my own education and personal growth became another major turning point.

My experience doesn't mean the obstacles aren't real. It just reminds me that our starting point doesn't always determine where we finish.

I still have a long way to go. I'm always trying to improve—not just financially, but in how I treat people, how I invest, and how I continue building a meaningful life.