When it comes to major life milestones, mortgages come before marriages for a large number of millennials, according to data released Friday.
In a recent survey [1] conducted by Redfin [2], 38 percent of Americans age 18–34 say they either would or have put off a wedding or honeymoon in favor of saving to buy a home.
That statistic makes sense, the brokerage says, considering the average cost of a wedding: $29,858 in 2013, according to wedding website TheKnot.com. Adding in costs for a honeymoon, that expense can balloon up to match the average down payment [3] on a home in many states.
The shift can also signal a change in values. According to recent data from the Pew Research Center [4], about one in five adults 25 and older have never married compared to only about one in 10 half a century ago. When asked about the role of marriage in society, 50 percent of Americans polled by Pew said society is "just as well off if people have other priorities" besides marrying and having children, with younger adults most likely to express that view.
However, Redfin says, the decision to buy a home is just as big a commitment as marriage—and could backfire for some couples.
Factoring in interest, the company estimates that only about one-third of monthly payments on a mortgage go toward paying down the principal in the loan's first few years, meaning it takes at least five to seven years before it makes financial sense to sell. (Citing data from the Centers for Disease Control and Prevention, Redfin says 27.4 percent of couples living together before marriage break up by the third year.)
"Breaking up is hard to do, but splitting financial assets makes it even harder especially considering the fees and closing costs that are associate with buying and selling a home, which if done too soon can wipe out all the equity accumulated," said Redfin Chief Economist Nela Richardson. "A house for most people is a long-term asset, which it should be if you are looking for a return on your investment."