Increasing debt and high-home prices are seen as factors to the growing trend of people buying homes together, according to a report by CNBC.
CNBC reported that while small, the share of first-time buyers buying homes with friends double to 4% this year, according to the National Association of Realtors profile of homebuyers.
CNBC’s Diana Olick said the rising student loan and credit card debt is one of the reasons for sharing the cost of a home “could make sense.” Also, the share of unmarried couples buying homes is now at 9%.
A report by Zillow earlier this year found that 20% of homebuyers carry student debt, and that 39% of buyers say student debt led to a delay in homebuying and impacts their ability to put money down.
“Two-thirds of buyers with any kind of debt put down less than 20% when they secure a mortgage, compared with 40% of buyers without debt,” the report says. “The share is even higher (76%) for buyers with student debt. Putting down less than 20%, while fairly common, not only increases monthly payments but also can lead to added expenses if a lender requires private mortgage insurance or other upfront fees to compensate for the added risk.”
"When we focus on low unemployment and the strong economy, we often forget that in many ways the rising costs of life can erode most of those gains," said Skylar Olsen, Zillow's Director of Economic Research. "Health care has never been more expensive. Getting a college degree, a path more likely to lead to economic success for those able to get through it, has never been more expensive. U.S. housing values and rents have never been more expensive.
“While incomes, both at the high and low end, are growing, the pace hasn't kept up with those crucial life expenses. That's fact and Americans are feeling it."
Student debt has doubled over the past decade to $1.5 trillion in 2018 and impacts 45 million borrowers.