A younger generation is no longer viewing marriage as a prerequisite to a mortgage, as they show some signs of committing to a house before a marriage, according to a recent Los Angeles Times article.
Catering to New Customers
"These key life-stage things impact when we buy, what we buy and where we buy," Mollie Carmichael, a principal at John Burns Real Estate Consulting in Irvine, told the Los Angeles Times. "But ... young people today aren't living by the same rules as 20 or 30 years ago."
Unmarried couples, same-sex partners, even pairs of roommates are making up a larger part of the housing market than they did a generation ago, says Rachel Drew, a researcher at Harvard University’s Joint Center for Housing Studies.
"The decline in married couples among younger buyers is almost entirely offset by growth in unmarried couples,” Drew notes. “You're not actually seeing a decline in two-adult households. [Unmarried couples] are much more likely than a single person to buy a home. They're acting like married couples."
Some couples are realizing they could take the cost of a big wedding and instead put it toward a home. The average wedding and honeymoon costs about $35,000, which is around the down payment many home buyers need, according to a study last year by real estate website Redfin.
"I think a lot of people my age have come to the realization that marriage is almost like a bonus,” Yvonne Carrasco, a 33-year-old public relations professional, told the Los Angeles Times. “If it happens, great. If it doesn't, great. But it's important to put yourself in the situation to feel safe and secure."
Still, while unmarried couples or singles may be showing more willingness to buy, some see marriage as still a key driver to home ownership.
"It's a pretty straightforward link," says Richard Green, director of USC's Lusk Center for Real Estate."Married people buy houses. Single people rent." For example, in California, 48.7 percent of households were headed by married couples in 2013, down from 51.1 percent in 2000, according to Census data. But more than two-thirds of married couples owned their homes compared to 40 percent of non-married households.
Source: “Many Buyers No Longer See Marriage as Prerequisite to a Mortgage,” Los Angeles Times (Jan. 2, 2015)