Apr 6, 2024 - Real Estate

Why some Chicagoans are buying homes with friends

Illustration of a best friend necklace with a charm in the shape of a house.

Illustration: Shoshana Gordon/Axios

Splitting the mortgage is one way for Chicagoans to become homeowners in this pricey housing market.

Why it matters: Roughly half of Americans are willing to split the bill on buying a home in less traditional ways, Axios' Shauneen Miranda writes.

What they're saying: Patrick Brandell bought a two-flat in Budlong Woods in 2001 with a close friend. He lived in the first-floor unit, while she lived in the one upstairs.

  • "We both had dogs and liked the idea of a backyard for them," says Brandell, who tells Axios neither could afford a similar property or a single-family home on their own.

How it worked: Brandell says they opened a joint checking account together, depositing a few hundred dollars each month to cover any emergency expenses.

  • "We also had a verbal agreement that if one of us were to pass away, ownership of the entire building would pass to the survivor," Brandell says.

The big picture: Some 15% of Americans already have bought a home with someone other than a romantic partner, and roughly half are willing to do so, according to a recent survey.

  • The majority of those interested in co-buying say they'd prefer to buy with a friend or sibling, and just under half say they'd buy with a parent.

Between the lines: The initial draws for co-owning are often financial, but the emotional bonds and support that come with co-living can keep people in these arrangements, experts say.

  • Living within a mile of a happy friend increases the likelihood that you'll be happy by 25%, according to a multigenerational study.
  • If you ask Phil Levin — founding team member of the car-free neighborhood Culdesac in Tempe, Arizona, and founder of co-living space Radish in Oakland, California — he'll tell you that living among close friends is "a cheat code for a happy life."

Yes, but: Co-buying can be a risky move. One co-owner's bad credit score can tank the other's chance of getting a good mortgage rate. Same goes for one's missed mortgage payments affecting all owners' credit scores.

  • Similar to divorce, if the relationship sours or one person wants to move, higher mortgage rates could put both in a tough spot.
Data: Redfin; Note: Responses with less than 14% were excluded from the chart; Respondents could choose multiple responses; Chart: Axios Visuals

The big picture: A striking share of renters and homeowners across the U.S. are skipping essentials like meals and medical care to keep a roof over their heads, per a new Redfin report.

  • And the majority are working longer hours or additional jobs to cover costs.
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