Millennials Prioritizing Buying A House Over Getting Married
More Millennials are choosing to buy their house before they decide to get married. Let’s take a look at their reasons...
More and more Millennial couples are now buying their houses before ever getting married. They’re making risky moves, which differ greatly from those of the former generations.
Changes of Time
According to Daniel Gershburg, Romer Debbas LLP’s partner, the number of Millennial couples buying houses together has been on the rise! In fact, Coldwell Banker Marriage and Homebuying Study shows that 25% of American Millennials are now opting to buy their house with their partner before they have even gotten married.
The much older generations, in general, would get married first, before they ever purchased a house - but today’s Millennials seem to be doing exactly the opposite. However, when you take a closer look at how generations greatly differ, it seems to be that the latter are making decisions according to the changes of the times. Today, the cost of living is higher, and the attitude towards marriage has also greatly changed.
Seeing Things Differently
It’s obvious that Millennials are making decisions differently than the generations before them. They see marriage and cohabitation differently, and are naturally dealing with said topics in a different fashion.
According to Kim Renfro, a reporter for Insider, more and more Millennial couples are now choosing to cohabitate before getting married. In fact, for every 1 member of the older generation who chose to cohabitate before getting married, there are 6 Millennials who also do. This information comes to us according to the data that the sociologist Wendy Manning has analyzed at the National Center for Family and Marriage Research, who further added that Millennials are also taking more time before marriage.
And while there are those who still do things “traditionally”, the rates of marriage are still decreasing. Young people are finding marriage less essential than than the previous generations did.
Rachel Sussman, Sussman Counseling’s relationship expert and psychotherapist, said, "Marriage rates are declining — Millennials are finding marriage less important than it used to be…
Couples living together in a home they purchased, or in a rental, are focused on being in the here and now."
However, even if they delay getting married, that doesn’t mean that they’re delaying buying a house! This is especially true for those who are already discussing engagement and marriage.
Millennials feel that it is more financially sensible to find a place to live in before stressing over a wedding; after all, weddings are not just stressful.... but also expensive. According to The Knot’s 2017 Real Weddings Study, the average cost for a home in the United States is $33,391.
Splitting Things Up
Due to the increasing prices of properties in the current real estate market, it is ideal to split up the mortgage.
Nowadays, in the lives of Millennials, homeownership is beginning to take on more significance, while marriage is taking more of a backseat. According to Clever Real Estate’s report, almost 90% of Millennials in America think that homeownership is the American dream’s most essential component. To nearly 75% of Millennials asked in the 2018 study of Bank of America, they consider owning a house to be more crucial than other major goals and events.
According to Student Loan Hero, houses are now more expensive than they were 40 years ago - meaning that most Millennials are going to need more time to save up for their dream house. Fortunately, most of them don’t want to prolong this process, and want to own a house as soon as possible.
Regardless of their marital status, for Millennials who are teaming up with a partner will be better-able to make homeownership affordable. If they split up the cost, they’ll then be required to save less individually, and it will therefore be easier for them to share the down payment and mortgage - especially if these expenses are paired with student loan debt and insurance premiums.
Renting is like throwing money down the drain... especially with prices on the climb. This might be one of the reasons why we’re seeing more and more Millennials leaning into buying their own houses. The trend does not only reflect the Millennials’ change in attitude and economic conditions, but also the way in which they approach financial situations.
Ahsley Dixon, the Gen Y Planning’s CFP, said, "To me, this says Millennials are willing to take on more risk with their finances, and they are looking for more tangible investments."
Comes With Risks
Even with all the advantages that come with buying a house before marriage, it’s worth noting that this also comes with risk.
Purchasing a house with your partner is not an endeavor to be taken lightly - especially since the two of you are not legally bound to one another. Not all couples end up getting married, even though at the beginning they may have had every intention to. And as a result, their bank accounts get hurt, which in turn can put them at legal and financial risk.
If the relationship ends, the couple will be facing mortgage and legal fees to remove one of them from the home deed or mortgage. And when both parties involved have decided to sell the property, they’ll be splitting the earnings - as well as the loss.
Clever Real Estate’s co-founder and former real estate investor, Ben Mizes, said, "Laws help married couples divvy up property after they've split up, but there's a lot of legal grey area around those who are unmarried."
He added, "I recommend involving a lawyer and drawing up a contract that spells out what will happen in the event of a breakup… It's not exactly romantic, but it can save serious headaches down the road for both parties."
Natalie Campisi of Bankrate stated that couples who are not married are deemed as individual parties by the court.
She explained: "It's up to the couple to write their own rules that will dictate how their property is handled in the event of separation or death… This cohabitation property agreement should include rules for how the property will be divided, buyouts, exit strategies, and the dispute process. You can also stipulate what percentage of the property each party owns."
Daniel Gershburg said, “Keep in mind that real estate laws also vary by state, from holding titles to offering buyout provisions, in which you can agree to buy the other person out of the house at market value after a certain period of time.”
The partner of Romer Debbas LLP recommends taking some time to thoroughly discuss the advantages and disadvantages of buying a house, and advises you to ask yourselves, "In the event of a breakup, does the house automatically get sold? What if I get laid off? If we want to rent it out, do we agree as to how much it is? How do they recoup the amounts that we put forth?"
By doing this, the both of you will suffer less, if it turns out that things don’t go as planned. You will also be more open-minded, when going into the deal, and you will be able to more effectively prepare, when worse comes to worst.
Gershburg also proposes that you and your partner should take time to ask for a real estate lawyer’s advice. He said, "Everyone should have a will; the process is so much more complicated if you don't have one… If you're not married, you want to cover as many bases as you can."
He further explained: "You need a team to button up all of these things — and you need to do this before identifying properties."
Of course, aside from the legal and financial risks, you also have to consider the emotions of the parties involved.
Rachel Sussman said, "Breaking up is very hard, and there's a chance if one person wants to break up and the other person doesn't, it's going to be very painful, and it's going to be harder to untangle, if they own a home."
Do you think the Millennials are making the right decisions? Are their decisions agreeable? What would you choose to do first: buy a house or get married?