Buying a home in today's market can seem challenging, particularly with rising home prices and mortgage rates affecting your budget. If you feel overwhelmed, co-buying could be a beneficial option to consider. According to Freddie Mac:

““If you are an aspiring homeowner, buying a home with your family or friends could be an option.””

— Freddie Mac

There are a few factors to think about before diving in. Let's take a look at why co-buying is becoming more popular among certain buyers and see if it could be a good fit for you as well.

What Is Co-Buying?

Co-buying involves purchasing a home with another person, whether it's a friend, sibling, or even a group of people. With the rising home prices and mortgage rates we see today, this approach is becoming a popular choice for many.

A survey by JW Surety Bonds found that about 15% of Americans have co-purchased a home with someone, and nearly 48% said they would think about it.

Why Consider Co-Buying?

The survey also looked into the benefits of co-buying a home. Here are some of the most common responses:

Sharing Costs (67%): Sharing costs can make a significant difference. Purchasing a home involves many financial aspects, from saving for the down payment to handling monthly mortgage payments. When you co-buy, you can divide these expenses, which can help make homeownership more manageable.

Affording a Better Home (56%): Pooling your financial resources can help you buy a larger or better-quality home than you might manage alone. This could mean having that extra bedroom, a bigger backyard, or finding a place in a more desirable neighborhood.

Investment Opportunity (54%): Co-buying a home can be a great way to invest. If you purchase a house with someone else, you have the option to rent it out, which can create a source of passive income.

Sharing Responsibilities (48%): Owning a home involves various responsibilities, such as maintenance and upkeep. When you co-buy a property, you can share these tasks, making it easier for everyone who is involved.

Other Co-Buying Considerations

While co-buying has its advantages, there are a few additional factors you should think about to determine if this option suits your needs. As Rocket Mortgage points out:

““Buying a house with a friend or multiple friends might be a great way for you to achieve homeownership, but it’s not a decision you should make lightly. Before diving in, make sure you understand the financial and logistical hurdles you’ll face, as well as the human and emotional elements that might affect the purchase or, more importantly, your relationship.”
”

— Rocket Mortgage

Make sure you and your co-buyer have clear communication about important aspects like how you’ll split the costs, who will take care of specific responsibilities, and your plan if either of you decides to sell your share in the future. Consulting with an expert can make discussing these topics smoother by helping you consider the pros and cons.

Bottom Line

If you’re trying to enter the housing market but struggling with affordability, co-buying might be a good option for you. However, it's crucial to plan carefully and ensure everyone involved understands the terms. If you're interested in exploring whether co-buying is right for you, let's chat.