There are a great number of people who dream of someday becoming homeowners. This is good as home construction and sales is one of the biggest driving forces of the American economy. In the past home ownership was seen as the next step after getting married, and done shortly before starting a family. But as the years go by many are starting to buy homes earlier in their relationship, with quite a few of the couples purchasing homes together before they get married.
Coldwell Banker recently conducted a survey of home buying behaviors. One of their biggest findings was that nearly one quarter of couples between the ages of 18 and 34 are buying homes together before they get married. This same survey also discovered that 35% of couples bought homes together before their second wedding anniversary. And it appears as though married couples are prone to buying homes. Out of all the couples surveyed, 84% stated that they have bought a house with their current spouse (this means that even those who have divorced and remarried are buying a new house with the new spouse).
The study also delved into the reasoning behind purchasing a house together. The reasons are vast: build equity, accumulate wealth, have a place to call your own, and others are all valid reasons. But why is there a trend to buy earlier rather than later? The vast majority of married homeowners surveyed (93%) said they had planned to buy a home after they were married. And 35% of them said they wished they had bought one sooner. This may be due to the fact that financial literacy has increased, sparking the interest in being debt free by retirement. People starting their careers earlier, and putting off children until later is another reason. But 80% of those surveyed said they bought the home in order to help strengthen their relationship.
Like every trend there are pros and cons. Buying a house together in order to strengthen the relationship will help to ensure that the relationship lasts. It is another obligation that the couple has, and it is something that makes staying together even more worthwhile. In the meantime they are building equity, getting a leg up on their finances, and they are showing financial responsibility. This responsibility is rewarded with lower auto insurance rates, and can be used as leverage when interviewing for a new position.
But there are always cautions to watch out for. The relationship could still go south; especially before marriage (it is much easier to break off a dating relationship than a marriage). If this happens one person may be stuck with the house, and the expenses of home ownership might be too much for them on their income. Another potential pitfall to watch out for is where you will be in the future. Buying a home at age 18 is great if you plan to be around in 10 or more years. But if a move for college or career comes up, the house might be sold at a net loss.
As more people are focusing on their careers earlier in life, they are waiting to get married and have children. But the part of the American Dream that calls for home ownership is still there. When a young professional is in a dating relationship, they want to show their commitment to one another. To do so, buying a house together is a logical step. With the market looking good, it is reasonable that in the next few years many more people will do so. If you are a looking to take this step, make sure to analyze your situation, and pass on buying if it looks like life may lead you elsewhere in the next 5 or 10 years.