Recently, new data released by Zillow revealed that, in expensive markets, there is an upward trend of unmarried couples buying homes together and a steady decrease in the number of single homebuyers. Zillow analyzed the Census Bureau’s American Community Survey data from the years 2005 to 2015 to find the percentage of young adults, ages 24 to 35 years old, who purchased a home in the given year.
In the U.S. almost 15 percent of homeowners ages 24 to 35 are unmarried couples, an 11 percent increase since 2015. According to Zillow, the median age of today’s homebuyer is 36 years old, with the majority of homebuyers looking for a home with their significant other. Millennials, ages 18 to 34, make up 42 percent of all buyers and have now claimed the largest share of all generational groups.
New York, New York and Los Angeles, California, both areas with a high home value index, have experienced a significant increase in the number of unmarried couples purchasing homes. In 2015, 12.9 percent of all young homebuyers were unmarried couples, up 3.4 percent since 2005. In Los Angeles, 11.9 percent of all young homebuyers were unmarried couples in 2015, up 3.8 percent since 2005.
According to the Zillow analysis, nationwide there has been a steady decrease in the number of single homebuyers. In 2015, out of all individuals who had purchases a home in the U.S. young, single homebuyers made up 25.4 percent, down 2.3 percent since 2005. However, not all expensive markets are in line with the national trend. In 2015, the number of single homebuyers between the ages of 24 and 35 years old in Los Angeles made up 32.7 percent, up 5.1 percent from 2005. According to Zillow, single women are more likely to purchase homes in Los Angeles as opposed to men.
In the past, the majority of homebuyers have been married couples. However, as home prices continue to rise, more couples who have not tied the knot are purchasing homes together since the home is more affordable with two incomes. According to Aaron Terrazas, a senior economist for Zillow, more individuals are purchasing homes together because they will qualify for a higher loan amount when compared to solo applicants. Singles who live on their own may be unable to afford or qualify for a mortgage on their dream home, which is why they opt to purchase a home with their partner even if marriage is not a part of their future plans. Having both incomes improves the likelihood of qualifying for the mortgage on a dream home.
This growing trend may lead to legal complications in the event that an unmarried couple decides to part ways. Prior to the transaction, it is beneficial to contact a real estate lawyer to prepare a written document. The real estate lawyer may provide documents such as a cohabitation, partnership, or property agreement detailing the arrangements if the parties were to split up. The document may also include details such as the percentage of equity each partner is entitled to and how much each party initially contributed to the mortgage balance, especially if there were different down payments provided by each person and a disparity in incomes. When purchasing a home with a partner, it is important to have an agreement outlining each party’s finances and desires for the property should the relationship end.
If you are interested in purchasing or investing in a residential real estate property with your partner, it is important to contact an experienced real estate attorney who can guide you through the process and protect each person’s legal rights. For more information about our real estate law practice, contact AGMB at 310-300-2900 for the Los Angeles office, or 212-201-1170 for the New York office.