Millennial Trend of Co-Buying Homes Soars 771% in 7 Years – How It Works
When it comes to homeownership, millennials are trailing behind older generations. At the age of 30, 42% of millennials own homes, compared to 48% of Gen Xers and 51% of baby boomers, according to Apartment List’s 2021 Millennial Homeownership Report. However, millennials are taking a different route than their predecessors when it comes to homeownership — by pooling finances with roommates, friends or partners.
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Data from real estate analytics firm Attom Data Solution shows that the number of co-buyers with different last names increased by 771% between 2014 and 2021, reports The Wall Street Journal. The pandemic only accelerated this trend.
Between April and June 2020, 11% of buyers of all ages groups purchased as an unmarried couple and 3% as “other” or roommates, according to the National Association of Realtors and as reported by the WSJ. These numbers increased from 9% and 2%, respectively, from the previous year.
Many millennials are putting off marriage and having children; however, not all of them want to live alone.
“A lot of them want to live in a communal setting, but they have enough money and they’re looking around at the increase in real-estate prices, and they want to get a foothold in this appreciating market,” Andy Sirkin, a real-estate attorney specializing in co-ownership, explains to the WSJ.
When it comes to ownership agreements, a joint tenancy is more popular amongst unmarried partners or family members, allowing owners to pass their ownership rights to their co-owners in the event of death, the WSJ reports. Friends and roommates typically choose a tenancy-in-common agreement, so that ownership rights are passed down to heirs.
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Co-buyers must also consider how to divide equity and mortgage payments. Experts also advise buyers to consult a real estate attorney to help draft a co-ownership agreement, the WSJ noted, from personal fallouts, job loss and everything in between.
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