The buying homes with friends trend is fading fast
Break clauses on co-owned houses are breaking friendships for some Americans
They say romance is dead… but now, the days of non-romantic co-ownership may also be fading.
In recent years, faced with one of the most unaffordable housing markets on record — on top of opportunities to find a significant other rapidly dwindling during the pandemic — settling down with a nice friend, sibling, cousin, or otherwise tolerable person started to make a lot of sense to prospective buyers. Indeed, as we were charting back in May, 14% of Millennials had reported buying homes with a friend. Just 1% of Baby Boomers said the same.
The One with the Break Clause
While buying a house with friends might at first seem like a fun idea from a ‘90s sitcom, mixing money with interpersonal relationships always comes with complications… and breaking out of shared mortgages can result in messy legal battles.
Whether it’s because those co-ownership arrangements are ending naturally, though, or that more cautionary tales about the difficulty of splitting up not-so-easily-divided assets are emerging, the trend of buying homes with friends appears to be slowing down.
As outlined by Dalvin Brown for the WSJ, the number of co-buyers with different last names jumped to ~1.3 million in 2021, but has since fallen almost 30%, according to property analytics firm Attom Data Solutions.
The same piece also cites a Zillow survey, which revealed that the proportion of co-buyers purchasing with friends had halved, from 14% in 2023 to just 7% this year.
Now, with the Fed’s interest rate cuts starting to feed through into lower mortgage rates, the housing market might start to look a little more promising for buyers — meaning that more home-owning buddies will want out of their current living arrangements, probably making for some pretty awkward dinner table conversation.
