The real estate market is as challenging as ever, particularly for first-time buyers. According to the National Association of Realtors, the average age of first-time homebuyers has increased from 31 to 35 in a 10-year span.
To combat rising home prices, many members of the millennial and Gen Z generations are turning to creative paths to homeownership, such as co-buying with friends or moving in with family.
Gilbert Nyantakyi and Kwame Nkrumah, both under 30, co-own a house in New York City. They’re part of a growing trend of millennials and Gen Z teaming up to break into the housing market.
“We bought our first property at 26,” Nkrumah said. “Very big risk that we took but it felt good doing it with a partner. We mitigated a lot of risk.”
For Nyantakyi, co-buying was essential.
“I would not be a homeowner in 2024 had we not co-bought,” he added.
Benefits of co-buying a home
An industry survey from earlier this year found that nearly 15% of Americans have co-purchased a home with someone other than a romantic partner, and another 48% said they would consider it.
Niles Lichtenstein launched the company Nestment to help simplify the co-buying process.
“For the past 50 years, property prices have way outpaced wage growth, and that’s created an incredibly large gap.”
Lichtenstein offers tips for potential co-buyers, including co-buying with someone you’ve shared major expenses with before, creating a joint bank account with three to six months of expenses and hiring a lawyer or using a service like Nestment to write an agreement that covers risks such as job loss, unplanned expenses, or one owner deciding to sell.
It’s not just co-ownership that’s becoming more common. According to Pew Research, one in four Americans between the ages of 25 and 34 now lives in multi-generational homes, where at least two adult generations live under one roof. Financial reasons are a major factor.
Kevin Kennedy, a Pennsylvania home contractor, has seen this firsthand. Since the pandemic, more than half of his jobs have been home conversions to accommodate multi-generational families.
“This is another alternative that’s more budget-friendly for people trying to get into a house. It’s going to be a lot more budget-friendly alternative for people to get into a house which is going to be their own,” he said.
Kennedy, who built an addition to his home for his in-laws, said, “They saved a lot of money because they’re not paying the big taxes on their house. They’re not paying any big insurance. We consolidated a lot of that into this house.”
He added that the best part was bringing three generations under one roof.
For those considering a multi-generational home renovation, Kennedy recommends budgeting about 50% of the cost of a home in your neighborhood.
As housing prices rise, these paths—co-ownership and multi-generational living—are becoming more popular solutions for people looking to own homes.
