As first-time buyers struggle to find an affordable home, many Millennials say they are willing to co-buy in order to access bigger mortgages.
Pairadime, a new fractional ownership solution with a focus on co-buying, surveyed 1,000 Millennials who say they don’t want to wait for marriage to co-buy a home.
Instead, they want to co-buy with their parents, friends, or other family members in order to afford a house in current market conditions.
Only 4% of respondents said they would wait until marriage to buy with another person.
“During the pandemic, people have been renting and they may have wanted more space, and so they looked at, perhaps, their roommate and decided, ‘Let’s go buy a home together,'” Jessica Lautz, vice president of demographics and behavioral insights for the National Association of Realtors, told the Wall Street Journal.
“Roommate” can also be substituted for significant other, family member, or even a person they matched with on an open marketplace.
This age group doesn’t see buying with their parents as a handout. More than half said they would prefer to receive financial assistance from their parents as an investment, not a gift. And they’re willing to make sacrifices in order to make their dream a reality: 36% would move home to save money for a house.
Co-buying with parents has been around for years but recently made a big jump.
In 1994, 1.3% of young adults who were first-time homebuyers listed co-borrowers age 55 or older, possibly their parents, and that number hasn’t dropped below 2.5% since 2012. In the past two years, the share rose a full percentage point.
For many, buying with another person is the only way to afford a house. Despite the fact that Millennials now make up 43% of home buyers, the most of any generation, they are also highly likely to be impacted by the affordability crisis.
The co-buying trend is especially important for single women, who make less than their male counterparts. Freddie Mac found that 60% of single female heads of household renters don’t think they can ever afford a home, with 80% citing insufficient savings for a down payment or closing costs.
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