Millennials Doing Things Their Way: First Comes House, Then Wedding

Forget waiting until marriage to move in with your partner, millennials are setting their own pace and throwing that tradition out the window (of their newly-purchased home).

Those aged 18-to-34 are increasingly buying homes with their significant other before tying the knot, according to a new survey from Coldwell Banker Real Estate that found nearly 25% of married home owners in this age group purchased a home together before they were married, compared with 14% of those aged 45 and up.

The survey, which polled 2,116 adults online, found couples buying a home together still plan to get hitched, and only 16% of Americans today have not bought a home with their spouse.

The trend is a result of a shift among this generation to postpone marriage, but not other major life events, says Randall Kessler, partner at Kessler & Solomiany Family Law in Atlanta

“They are getting comfortable with the idea of getting married later,” he says. “They are still having babies, buying cars and doing things that 10 years ago they wouldn’t have done if they weren’t married. It’s now more accepted and common not to put your life on hold until after you get married.”

The low interest rates make it more affordable to become a homeowner right now, so it makes better financial sense for young adults to buy instead of rent in some markets.

“But you can get better rates if you are married than when you are not,” says Nazanin Barouti, president of California-based law firm Barouti.

This trend has been the norm among same-sex couples for a long time, says Kessler, who adds that going through the home-buying process could serve as a test run for couples on how they will tackle problems in the future.

“If you can’t do business with someone, then should you really get married? I think [in the past] parents put more pressure on their children to get married and that is partially why the divorce rate is so high. Which is more permanent—getting married, or getting a house?”

However, New York City-based attorney Ingrid Gherman says women in particular need to be careful about entering into a mortgage before marriage to make sure their finances are secure in case of a breakup.

“I see time and again: Women come into my office and they are behind the eight ball in terms of earning capacity than their male counterparts,” Gherman says. “If you’re not married  there are no legal protections for her [when splitting a mortgage in a breakup] . Now you have to decide how to break up your assets. If you are civilized people this is fine, but if you have one crazy person, it’s not going to happen.”

Any names on the mortgage are legally responsible for the debt, regardless of earning capacity if the couple is not married, she explains. When a married couple divorces, the court may apportion the debt to the non-named spouse on the mortgage during equitable distribution so it’s not the sole responsibility of the mortgage holder, she says.

“The judge may give the wife less [financial responsibility] because she is not legally responsible for the mortgage,” Gherman says. “But if they’re not married, there is no one saying ‘you should pay part of the debt.’”

Barouti suggests having a prenuptial- type agreement that puts both partners on the title of the house so the equity is split and the debt isn’t just left to one party.

“These things need to be addressed when a couple is still on good terms,” she says. “It is confusing as to how the property is titled and the right of survivorship is listed in the title. If you break up, one person may want to keep the house and another may want to sell.”

Laws may vary by state as to how the house would be split post-breakup, Barouti says, so crafting an individualized agreement can help  create the most fair deal.

Kessler adds though that if nothing else, try and maintain control over the equity rather than the debt.

“It’s just better to be on the title than it is to be on the mortgage,” he says. “The sole title holder gets the equity, but the mortgage holder gets the debt.”