Down Payments Before Diamond Rings

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Published Date 12/2/2024

The cart before the horse? That’s what people used to say when couples either had babies or moved in together before deciding to marry. Now it’s two or three carts before the horse. The Wall Street Journal’s Dalvin Brown and Paul Overberg report on how couples are deciding they would rather take the plunge into homeownership than walk down the aisle.

“In reshuffling the traditional order of adult milestones, some couples may decide not to marry at all, while others say they are willing to delay a wedding,” say the journalists. “Buying a home is as much, if not more of a commitment, they reason. It helps them build financial stability when the housing market is historically unaffordable."

Brown and Overberg report that In 2023, about 555,000 unmarried couples said that they had bought their home in the previous year, according to a Wall Street Journal analysis of Census Bureau data. “That is up 46% from 10 years earlier, when just under 381,000 couples did the same,” they said.

They go on to say that unmarried couples amounted to more than 11% of all U.S. home sales — a percentage that has climbed steadily over the past two decades all while marriage rates have fallen — making up triple the share of the housing market that they did in the mid-1980s, according to the National Association of Realtors.

Young couples are increasingly prioritizing homeownership over marriage, driven by soaring housing costs and changing social norms. While this arrangement offers financial benefits, it also comes with unique legal challenges that couples must navigate carefully.

Middle-agers Mark White and Sheila Davidson exemplify this trend. They purchased a lakeside townhouse together in Newport News, Virginia, in 2021, though only Davidson's name appears on the deed. Without marriage documentation, they face uncertainty about inheritance rights, despite their children knowing their wishes.

The financial motivation is clear: homeowners held a median wealth of nearly $400,000 in 2022, compared to roughly $10,000 for renters, according to Federal Reserve data. This stark difference has led many couples to prioritize building equity over traditional relationship milestones, say Brown and Overberg.

They cited another couple still in their 20s who decided rising interest rates prompted quick action. They used $80,000 of their combined savings to purchase a split-level condo in Washington, D.C. "Buying a house is actually a bigger commitment than an engagement," Dixon noted. They got engaged eight months after closing, planning a modest ceremony that will cost less than their home's down payment.

The timing reflects broader societal shifts. The median age for first marriage has increased to 30.2 for men and 28.6 for women, according to Census Bureau data. Similarly, the National Association of Realtors reports that first-time homebuyers are now typically 38 years old, up from 31 in 2014.

However, legal experts warn about the risks. Without marriage protections, property rights and financial obligations can become complicated if the relationship ends. While cohabitation agreements can provide similar protections to prenuptial agreements, many couples avoid them due to cost or discomfort with planning for a potential breakup. These agreements typically cost between $1,000 and $3,000.

Recent data supports these decisions. From 2019 to 2023, median single-family home prices rose 44%, while average wedding costs increased 25%, according to the National Association of Realtors and The Knot, respectively.

Rising rental costs are another factor pushing couples toward homeownership. About three-quarters of couples now live together before marriage, forcing them to weigh the benefits of buying versus renting. For Sonali Prabhu and Ryan Willis, both 27, an $800 rent increase on their Austin apartment spurred them to purchase a $425,000 house. While their mortgage payment is slightly higher than their previous rent, they gained significant space. They split the down payment, with Prabhu contributing an additional $50,000 for renovations.

This shift reflects a new reality where financial foundations often take precedence over traditional relationship markers. As Emily Luk, co-founder of the financial website Plenty, observed, "A mortgage feels like a more concrete step toward their future together than a wedding."

WSJ,TBWS

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Darren Orshoff is a Marketing and Real Estate professional, licensed Realtor with the California Department of Real Estate DRE#01803671 with WSR Real Estate DRE#01977642.  Darren is also a Certified Mortgage Planner, A Certified Financial Literacy Coach, A Dave Ramsey Trained Financial Coach, A Certified Mortgage Advisor, and while Darren is licensed by the NMLS, he is not originating loans but refers lending transactions to Golden Empire Mortgage, Inc. ("GEM") [NMLS ID No. 2427] licensed by the Department of Financial Protection and Innovation pursuant to the California Residential Mortgage Lending Act, for which he represents as the Corporate Marketing Coordinator.

Darren Orshoff

Realtor, Marketing Guru, Sushi Lover, Dad, Ham

License: CalDRE#01803671

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