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To handle the rising costs of ownership, some Americans are buying a home with a friend or roommate. The percentages are still low, but the National Association of REALTORS® does report an increase.
In the second quarter of this year, the share of homes purchased by roommates rose to 3% of all buyers, up from 2% a year earlier. The trend has been increasing since the pandemic.
Home prices have risen by double-digit percentages over the past year. Buying and saving power can increase when you partner up to buy.
Still, purchasing a home with a roommate or friend may require some ground rules to be set and foresight to prevent spats later on.
“Certainly if someone does partner up in a romantic relationship and wants to move out, or that partner wants to move in, you suddenly have a house of three,” Jessica Lautz, vice president of demographics and behavioral insights at NAR, told WTOP News. “Or what if one person gets a job on the other side of the country, what happens to that property?”
Other questions to consider, Lautz adds, are will both buyers contribute to the down payment and closing costs equally? Will they agree to earn equity equally? Are the rooms in the home the same size or who will get which room?
Those who purchase with a roommate or friend may want to put all these items in writing and have them addressed with a legally-binding, attorney-drafted agreement before making a home purchase together, Lautz notes.