The economic downturn and the slow market recovery have left many struggling. They have also opened up avenues previously unseen and quite unexpected.

Instead of going to traditional lenders, many millennials are turning to their parents for home loans. According to a new study conducted by the National Association of Realtors, 27 percent of first-time buyers have turned to their parents for financial help when it comes to down payments and mortgage.

The trend started as the economy got worse during the Great Recession and has risen steadily since then to reach the latest figure. Though the housing market and the economy at large is in a recovery mode, the pace is too slow for first-time buyers who need more help with the limited and unpredictable income sources at play.

The study revealed that it is not just loans from parents, but also cash gifts from relatives or friends that are coming in handy, though the former is more prevalent. Tough job markets, existing student loans and increasingly stricter mortgage rates are hardly conducive to fast recovery.

Coupled with these conditions are expert predictions of an impending price rise for homes. This means those who are light cash want to go ahead and purchase a home while it's still affordable.

Looking toward the baby boomer parents for help hardly seems surprising in such circumstances. The parents too seem to be in a better position to help with rising stock and property values giving them a solid financial cushion for the future. Data compiled by Fidelity Investments show that boomers have seen their retirement savings almost double in the past two years.

The recession has shown us some unprecedented facts for sure. First, it was kids moving back home because they could not afford to pay rent, and now it's parents stepping in to help them buy homes. Maybe there's an ulterior motive behind the parents' altruistic deeds after all!

But on a more serious note, this trend needs a deeper look, specifically into the reasons why millennials are not quite confident of meeting their EMIs (equated monthly installments). A 2013 Federal Reserve report showed that inability to meet down payment was a reason for most people to rent rather than buy, though a large percentage was more than ready to move out of their apartments.

Another NAR survey revealed that the burden of student loans that prevented 54 percent of future home buyers from realizing their dreams. Shrinking paychecks and job uncertainties have further compounded the problem.

In another turn of events, a bad market is always an investor's paradise. Witness how many investors have scooped up real estate, some with cash deals. This had led to shrinking inventory and even less choice for the first-time buyers.

Thankfully, the tide seems to be turning even if the recovery is slower than expected. But with cash gifts expanding to more kids from their parents, first-time buyers are growing excited once again. With their wealth rebuilding, more American parents are keen to help their kids out instead of letting them work it out on their own.

As per IRA rules, one can make a make a gift of $14,000 to a child without incurring taxes. For some, this is more than enough to take care of the down payment and closing costs.

Rising home-price appreciation is helping both borrowers and lenders get back their equity and financial footing. But these developments are not free from negative repercussions.

Despite the positive aspects of the trend, financial institutions are wary of rejoicing too much. Determining the source of funds is important to gauge the mortgage default rates, and those who have managed a down payment with the help of gifts from parents and family might not be good candidates for loans in future.

It may help them right now, but in the long run it does nothing to add to their credit history, which may be something to worry about.