How Co-Buying a Home Helps with Affordability Today
How Co-Buying a Home Helps with Affordability Today
Buying a home in today’s market can feel challenging, especially with rising home prices and mortgage rates straining your budget. If you’re feeling unsure, co-buying might be an option to help you take that first step. As Freddie Mac explains:
“If you are an aspiring homeowner, buying a home with your family or friends could be an option.”
However, there are a few factors to consider before moving forward. Let’s take a look at why co-buying is becoming more popular among some buyers and determine if it could be a good option for you as well.
What Is Co-Buying?
Co-buying involves purchasing a home with someone else, such as a friend, sibling, or even a group. Given today’s high home prices and mortgage rates, it’s an option that’s gaining traction.
A survey by JW Surety Bonds found that nearly 15% of Americans have already co-purchased a home, and another 48% are open to the idea.
Why Consider Co-Buying?
The same survey also asked participants about the benefits of co-buying a home. Here are some of the most popular responses (see graph below):
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Sharing Costs (67%): Purchasing a home is a significant financial undertaking, from saving for the down payment to covering monthly payments. Co-buying allows you to split these expenses, making homeownership more affordable.
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Affording a Better Home (56%): By combining financial resources, co-buyers may be able to purchase a larger or higher-quality home than they could on their own. This could mean an additional bedroom, a bigger backyard, or living in a more desirable neighborhood.
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Investment Opportunity (54%): Co-buying can also serve as an investment strategy. For example, purchasing a home with someone to rent out can generate passive income.
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Sharing Responsibilities (48%): Homeownership comes with numerous responsibilities, such as maintenance and upkeep. Co-buying allows you to share these duties, easing the burden for all parties involved.
Other Co-Buying Considerations
While co-buying offers several advantages, it’s important to consider other factors before deciding if this option is right for you. As Rocket Mortgage explains:
“Buying a house with a friend or multiple friends might be a great way for you to achieve homeownership, but it’s not a decision you should make lightly. Before diving in, make sure you understand the financial and logistical hurdles you’ll face, as well as the human and emotional elements that might affect the purchase or, more importantly, your relationship.”
Essentially, ensure you and your co-buyer have a clear agreement on key aspects, such as how costs will be divided, who will handle specific responsibilities, and what steps to take if one of you decides to sell their share of the home in the future. Consulting with an expert can help you navigate these discussions and evaluate the pros and cons more effectively.
Bottom Line
If you’re trying to enter the housing market but are facing today’s affordability challenges, co-buying might be a viable solution to help you make your move. However, careful planning is essential to ensure all parties are aligned on the details. Let’s connect to determine if co-buying is the right option for you.
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