With inflation, home prices and mortgage rates at major highs, many homebuyers have been looking at other options when it comes to securing housing they can afford. Living or co-buying with family and/or friends is one of these options that has grown in popularity recently, according to a new study from Realtor.com
Realtor.com’s new survey found that of those who are planning to buy a home within the next 12 months, half (51%) are potentially looking to their parents to help them prepare for buying a home, with nearly one third (29%) saying they’ve already moved in with their parents to help save money in preparation for buying a home and another quarter (22%) saying they would consider doing so.
Similarly, one third (32%) of respondents are even cohabitating with other family members to help save enough money to buy a home, including siblings, aunts and uncles, and cousins, and another 24% would consider doing so.
- In addition to the short-term savings that living with family provides, many are planning to stay close to family even after they’ve saved up. 28% of respondents who are planning to buy a home in the next year are doing so in part to be closer to their family.
- Of those who are planning to buy a home to be close to family, many are motivated by financial reasons. Helping care for other children in the family was cited as a top reason by that group (50%), followed by needing affordable help caring for their own children (44%).
- Other top cited reasons for buying near family were because they liked the area, prices/cost of living have become too high where they currently live, or health issues.
- While many would-be buyers are looking to buy a home near their family, many respondents already call their family neighbors, with about 4 in 10 surveyed consumers saying their parents, siblings, extended family or grandparents have purchased a home near them.
- As housing affordability continues to be a barrier for many would-be buyers, co-living or co-buying with family has gained significant popularity in recent years. 83% of those surveyed would consider buying a home to live in together, as a primary residence, with someone other than their spouse/partner, including an extended family member or friend.
- Respondents were most open to buying a home with their child (37%), a romantic partner they’re not married or engaged to (31%); a sibling, cousin or other family member from the same generation (27%), and their parents or in-laws (23%).
- For those who would consider buying a home with someone other than their spouse, top reasons cited included that pooled resources would afford them a better location (43%), a more updated home (41%), and/or a bigger home (38%).
- One-third (36%) of those who said that they would buy a home with someone other than their spouse said it was because they’re already living together and would prefer to buy and start building equity sooner, and 29% said it’s because they can’t afford to buy a home on their own.
“The challenging market conditions this year are changing buyer behavior in significant ways, driving many more people to explore alternative living situations they may not have considered in the past,” said Realtor.com Chief Economist Danielle Hale. “Mortgage rates hovering at or near 7% have eroded buyers’ purchasing power at a time when the consistently low number of homes for sale has kept housing markets surprisingly competitive.”
Clare Trapasso, executive news editor at Realtor.com, added “While home buyers have long received financial assistance from family members to help them afford a home purchase – especially first-time home buyers who may not have already built up equity – we’re seeing more and more prospective buyers take this a step further. Faced with ongoing housing affordability issues and rising childcare costs, we’re seeing parents and children becoming roommates again in later years as the ‘kids’ save up to purchase their own place, siblings moving near each other to pool childcare resources, and some even buying homes with family to split the financial burden and make homeownership a reality.”
For the full report, click here.