Communal home-buying unlocks Gen Z and Millennial ownership
The Future. Millennials and Gen Zers are teaming up with friends (and maybe some strangers) to make homeownership a reality. It may not be people’s first choice, but because of increased isolation and rising costs, it may be the closest thing to the American Dream.
The updated American Dream
It’s too expensive for many people to buy a home on their own… so they’re teaming up with other prospective buyers.
- According to Insider, real estate analytics firm ATTOM Data Solutions reported that co-home buying among Americans with different last names increased by 771% from 2014-2021.
- This year, Redfin found that 15% of prospective buyers plan to split their mortgage with a roommate that is not a spouse or partner.
It’s the rise of the mini co-ops.
This trend has actually been steadily rising over the past decade, but new economic pressures may take co-owning mainstream.
- Interest rates are through the roof as the Federal Reserve tries to tamp down inflation, doubling the interest rate on a 30-year mortgage in just a year.
- Even with the COVID-era pay raises, the cost of living across the spectrum has increased dramatically, forcing people to spend more on rent, insurance, student debt, etc., making it difficult to save for a down payment.
- Americans are also very single at the moment, meaning many are relying on one income for bills. Inflation isn’t helping, either.
For many minority communities, the home-affordability crisis is much starker. It’s a reality that even banks are waking up to, removing the usual barriers to qualifying for a home loan.