Gen Zers are among those most likely to co-purchase a home with family or friends. (iStock)
With home prices still unaffordable for many buyers, some homebuyers are turning to co-purchasing with those other than romantic partners, a JW Surety Bonds study found.
Close to 15% of Americans have co-purchased a home with a family member or friend rather than their spouse or partners. An additional 48% of those surveyed said they would also consider co-purchasing with non-romantic partners.
Buyers that co-bought homes with non-romantic partners opted to buy with their parents most often. Twenty-nine percent of respondents bought with parents while 26% bought with either a sibling or a friend.
Gen Zers are among those most likely to co-purchase this way. Seventy percent of the respondents that said they’d be willing to co-purchase were part of Gen Z. The overwhelming reason for purchasing with another person was a lack of funds to buy a home alone. One in 4 respondents cited this as the reason they approached a friend or family member to buy with them.
Buying a house has advantages, according to buyers. Sixty-seven percent said co-buying helped with cost sharing, 56% said they were able to buy a nicer home and 54% said co-buying helped them purchase a home as an investment property.
Whether you’re buying alone, with a partner or with a non-romantic partner, you want to make sure you have the right lender that offers low interest rates. Credible lets you view multiple mortgage lenders and provides personalized rates within just minutes, all without impacting your credit.
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Higher incomes are necessary to buy a home
With home prices still high, a higher income is required to reasonably afford a home. In 2023, the average household income necessary to buy a home was $107,000, up from $88,000, according to data from the National Association of Realtors.
“Given the erosion of housing affordability due to higher home prices and mortgage rates, the household income for those who successfully purchased homes jumped by nearly $20,000 and topped six figures for only the second time in our records,” Jessica Lautz, NAR deputy chief economist and vice president of research said in a statement. “In a still-competitive housing market, more well-off home buyers were able to have their bids accepted by offering larger down payments and even by paying cash.”
It’s not just income levels that have changed for the average homebuyer, other characteristics have changed as well. For example, 70% of recent homebuyers didn’t have any children under 18 living in the home, which is the highest share recorded in NAR history.
Back in 1985, rates of homebuyers with children were substantially higher. Just 42% of households didn’t have children under 18 in the home.
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Some generations giving up on homeownership dream
As one of the younger generations, Gen Zers are among those least likely to own a home. In 2023, 26% of Gen Zers owned a home, barely up from 2022, a Redfin study reported.
The percentage of millennials who own homes, on the other hand, rose from 52% in 2022 to 55%, despite rising prices. For Gen X, the homeownership rate went from 70% to 72% in 2023.
While homeownership rates are low for Gen Z, the generation is still set to outpace older generations. For adult Gen Zers ages 19-25, their homeownership rates are higher than both millennials and Gen Xers when they were the same age.
For 24-year-old Gen Zers, the homeownership rate is 27.8%. For millennials when they were 24, the homeownership rate was 24.5% and for Gen Xers, the homeownership rate was 23.5% at age 24.
“Housing affordability remains strained, but things are looking up for Gen Z,” Daryl Fairweather, Redfin Chief Economist said. “The recent decline in rents means Gen Zers can put more money toward saving for a down payment. Plus, the job market is strong, and career opportunities have become less concentrated in expensive cities during the remote work era, meaning many Gen Zers can choose to live somewhere more affordable.”
No matter what generation you belong to, ensuring you have the right mortgage lender and rate can help you secure an affordable monthly payment. You can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.
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