More Young Couples Commit — To Homeownership Before Marriage

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First comes love, then comes … mortgage? A new study indicates that young couples in committed relationships have been far more likely than older generations to purchase homes before getting married.

A recently released CDC study quantified a trend that most of us are well aware of: Couples are increasingly likely to live together before marriage. From 2006 to 2010, nearly half (48%) of American women ages 15 to 44 said that they had ever cohabitated—i.e., lived with a romantic partner without being married. In 1995, by contrast, just 34% said that they’d lived with a partner before marriage.

Now, the results of a soon-to-be-released survey from Coldwell Banker indicate that today’s young couples are also more likely to buy homes together before marriage. Nearly one-quarter (24%) of polled married couples ages 18 to 34 said that they purchased a home before they were married. Among married couples ages 45 and up, just 14% said that they bought a house together before tying the knot. Couples in the Northeast stand out as particularly likely to buy real estate before getting hitched: Just 60% in the survey waited until marriage to purchase a home, compared to 72% in the tradition-minded South, where people tend to marry younger (and therefore, poorer).

In a phone interview, Dr. Robi Ludwig, a psychotherapist and Coldwell Banker’s official “lifestyle correspondent,” said that buying a home together has become “the new engagement ring” for some young couples. They’re committing to purchasing real estate as a couple regardless of whether they’ve set a wedding date. Some even forego lavish weddings and honeymoons in order to cover the down payment and a chunk of the mortgage. “Millennials have a very pragmatic state of mind,” said Ludwig. “They know that they have an opportunity here, with low mortgage rates and low housing prices. And they think, ‘We’re moving toward marriage anyway, so let’s buy.’ It makes sense.”

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This doesn’t necessarily mean that more millennials—married or not—are buying homes nowadays. The Coldwell Banker survey, set to be made public on April 22, deals exclusively with couples who are now married and own homes. It doesn’t include data on overall homeownership rates among millennials.

For that, we can turn to a study released earlier this year highlighting how young Americans have been reducing their debt levels over the years. Avoiding two big purchases that usually account for consumers‘ biggest monthly payments—cars and homes—have certainly helped the cause. From 2007 to 2010, car debt in young households (35 and under) dropped from 44% to 32%, while homeownership among young adults declined from 40% to 34% from 2007 to 2011. “Young adults don’t have the mortgage, but they also don’t have the house,” said the author of the Pew Social Trends report, Pew senior research associate Richard Fry.

There is some sign, however, that a certain breed of millennial is more interested in homeownership of late. According to the PulteGroup Home Index Survey, among renters ages 18 to 35 with income of more than $50,000 annually, 65% say their intention to buy a home has increased significantly or somewhat over the last year.

For young people who are in committed relationships and interested in homeownership, Ludwig said that the benefits associated with shopping for a home together go well beyond the prospect of owning property. While considering the very big step of buying a house, couples are forced to deal with exactly the kinds of issues that they should discuss before marriage. “When purchasing a home, there is a need to be transparent on many levels,” said Ludwig. “You must be upfront with your partner, and you also have to get real honest with yourself.” It’s possible to get married without actually knowing how much money your wife earns, or how much credit card debt your husband accrued in college. Salaries, debt, and more are all on the table when the time comes to get a mortgage, however.

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Couples also must obviously figure out where they want to live, and envision how long they’re likely to live there. Even topics like how many kids you want to have come up—because that will factor in to the location, size, and style of home you buy. “It’s easy for couples to not think or talk about these things,” said Ludwig, “but they’re forced to once mortgages and banks are involved.”