Apr 6, 2024 - News

Why Minnesotans 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 with someone who's not your spouse is one way for Minnesotans 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.

State of play: 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.

What they're saying: Co-owning a duplex in Longfellow with another family helps Casey Epstein when it comes to his 3-year-old daughter, who often visits the upstairs unit to make focaccia or pizza dough.

  • "It's a beautiful takes-a-village situation," Epstein tells Axios.
  • Another perk is sharing the cost of essentials like a new washer and dryer, says one of the co-owners, Elliot Altbaum, who is pushing for more housing that supports similar living arrangements.

Zoom in: Dodge County, near Rochester, is a hot spot for co-buying among non-married couples.

  • Such transactions grew 16% in 2023 compared to the previous year, one of the highest jumps nationwide, per co-ownership marketplace Pacaso.

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."

How it works: Tracy Waterman, who's shared a Lyndale duplex with two friends since 2021, says they're all on the title to the house.

  • One person's name is on the mortgage, and the other two send her their share of the monthly payment "like we would if we were splitting rent," Waterman tells Axios.

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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