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