Buying a home is often considered a milestone in life as well as in a relationship. According to the National Association of Realtors, 67 percent of homebuyers were married couples, up from 58 percent five years ago. However, many couples are reversing this order, opting to join together in homeownership before matrimony.

Unmarried Homeowners

The NAR's 2015 Profile of Home Buyers and Sellers found 7 percent of homebuyers were unmarried couples¹. While this sounds like a small fraction of homebuyers, this is a growing trend among younger buyers. The median age for this demographic was 33 years old, while the median age for married couples was 36 and those for single females and males even higher, at 50 and 45, respectively.

According to the U.S. Census Bureau, the number of people living with a partner, as opposed to living alone, with family, with a spouse or another arrangement, has grown steadily since 1996². In 2010, more than 16,000 homeowners lived with a partner, about double the amount of just a decade before.

There are plenty of reasons millennials are opting to buy a home before tying the knot. More than half of unmarried homebuying couples were first-time homebuyers and the majority of them did so because they wanted to own their own property, as opposed to wanting a bigger space or because of a change in their family situation. However, these aren't the only reasons to buy a home together.

Financial Reasons

GOBankingRates reported that increasing costs of both weddings and rentals could be contributing to the trend³. As weddings become more expensive, millennials hoping to save money for future events choose to hold off. Meanwhile, rent is becoming more expensive and, on a long-term time frame, owning a home makes more financial sense. Rather than paying a monthly bill only to be granted one month's worth of housing, a monthly mortgage payment means a couple is growing their home equity. Once the mortgage is paid off, they have something to show for all those payments.

Forbes contributor Lucy Mueller explained that buying a home as a financial decision has also led millennial homeowners to view the purchase differently⁴. They aren't looking to buy a forever family home; a house is an investment. They plan to sell it after a few years. Nela Richardson, Redfin's chief economist, told Mueller that this mindset affects the type of homes millennials are drawn to.

"We know that a lot of millennials want to live in the city, they want to live close to work, they want to live in walkable neighborhoods and guess what? These neighborhoods are great investments," Richardson explained. "The millennials I'm profiling are typically not the ones buying large McMansions in the suburbs that will take longer to pay. Many of them are buying condos in the center of cities."

According to the NAR, more than half of these homebuyers listed a convenient commute to work as a main factor in the homes they chose. As more unmarried millennials begin to become homeowners, real estate agents will want to seek out properties that will appeal to them: affordable, single-family homes and condos in walkable neighborhoods.

Source:

¹ National Association of Realtors
² U.S. Census Bureau
³ GOBankingRates
⁴ Forbes 

As March comes to a close and the final remnants of winter melt away, it's time for homebuyers to start thinking about jumping into the exciting spring housing market. Historically, spring is one of the most popular times to buy, and it's looking like this year will be no exception. In fact, Realtor.com predicted this spring will be the busiest housing market since 2006.¹

Buyers will be coming out in droves this spring for a reason. It's a great time to buy. If you have been planning to purchase a home sometime within the next few years, it could be in your best financial interest to do it now.

Here's why:

1. Mortgage Rates are Still Low

With the December announcement that the Federal Reserve would begin to raise interest rates, many Americans feared that mortgage rates would begin to rise in 2016. Instead, the country has been shocked to see mortgage rates drop week after week to reach historic lows.

At the end of February, Realtor.com's Chief Economist Jonathon Smoke told the National Association of Realtors that based on the 30-year fixed-rate mortgage rate that week, buyers had about 5 percent more buying power than they did at the end of 2015.²

Keeping Current Matters, a real estate analytics company, discussed how The Mortgage Bankers Association, Freddie Mac and NAR have all predicted that mortgage rates will be higher by spring 2017.³

Purchasing a home now could lock you in to a lower mortgage rate. The longer you wait, the higher your rate may be.

2. Home Prices Will Continue to Appreciate

NAR reported that due to the small amount of inventory currently available, home prices are rising and are projected to keep on going up.

KCM discussed data from CoreLogic, who predicted that prices will appreciate 5.5 percent over the next 12 months. Using that data, KCM calculated how much a homebuyer could save by purchasing a home now versus next year when both prices and interest rates will be up:

A home today costing $250,000 at a 3.62 percent interest rate would probably cost $263, 750 at a 4.6 percent interest rate by the first quarter of 2017 (the interest rate is based on predictions by Freddie Mac). Purchasing the home now would save the buyer about $212 per month, which equates to an incredible $76,565 in savings over the 30-year life of the loan.

3. It is Still Cheaper to Buy than Rent

In November 2015, HousingWire reported that 88 percent of property managers raised their rent prices in the last year.4 Sixty-eight percent of these property managers said they would probably raise it again during 2016. Renting is becoming increasingly less affordable compared to owning.

In fact, KCM reported that in the current market, you need about 30 percent of your income to afford the median rent, whereas you only need about 15 percent of your income to afford the median home. There is no reason to help pay off your landlord's mortgage when that check could be going toward gaining equity in your own property.

You're probably thinking, that monthly payment may be cheaper, but what if I don't have enough money to cover the down payment? Well, you may be more prepared to cover one than you think. Remember, it is possible to find a loan that allows you to make only a 3 percent down payment, and if that is the case you could have enough to buy a home right now.

But Isn't it a Seller's Market?

It is true that demand is high and supply is low, but that doesn't mean you should avoid the market. What it means is you need to be extra diligent when shopping for a home. Make sure to hire a fantastic Real Estate Agent who understands the competition in your local market, knows how to negotiate and will really fight for you.

Having a lender's mortgage pre-approval letter to show sellers is a powerful tool. You won't waste time shopping for homes out of your budget, sellers will take your offer seriously, and you will greatly improve the likelihood of winning the bid for your new home.

Other options include getting a pre-inspection. Doing so could make you feel comfortable removing the home inspection contingency from your offer, a very appealing move from a seller's perspective. The Post also suggested expressing flexibility based on the seller's needs. If the seller wants to move quickly, be willing to move in right away, and if the seller needs more time, show that you can wait.

Research shows that homeowners are happier and healthier than renters. Why wait? Now is always the right time to invest in your happiness.

Sources

¹ Realtor.com
² The National Association of Realtors
³ Keeping Current Matters
⁴ HousingWire