The Rise of Co-Buying ─ How Friends and Family Are Teaming Up to Purchase Homes

Homeownership has long been a cornerstone of the American Dream — but in recent years, it’s become harder to achieve. Home prices are soaring, interest rates are unpredictable, and saving for a down payment while managing debt has never been tougher.

As traditional paths to buying become more difficult, a new trend is emerging: co-buying. More Americans are choosing to team up — pooling income and resources to buy a home together. Whether it’s siblings, friends, or unmarried partners, this approach is changing what homeownership looks like in 2025.

Why Is Co-Buying Becoming More Popular?

Several factors have contributed to the rise of co-buying:

• Rising home prices — Housing affordability is a major issue, and co-buying allows people to split costs rather than shoulder them alone.
• High mortgage rates — Sharing a mortgage means lower individual debt burdens and increased purchasing power.
• Student loan debt — Many young buyers struggle with student loans, making co-buying an attractive option.
• Changing lifestyles — Some people prefer communal living with close friends or family rather than renting or living alone.
• Investing in real estate — Co-buying allows individuals to enter the real estate market as an investment opportunity.

Who Is Co-Buying Today?

According to the National Association of Realtors (NAR), the number of co-buyers — non-married individuals purchasing property together — has increased significantly in recent years. Millennials and Gen Z buyers, especially those saddled with student loan debt or living in high-cost cities, are among the most likely to consider co-buying. Even Baby Boomers are joining forces with adult children or siblings to downsize or relocate affordably.

How Does Co-Buying Work?

Co-buying involves two or more parties purchasing a property together, either as joint tenants or tenants in common. Each co-buyer contributes financially and holds a share of the property based on their agreement.

Types of Co-Ownership

1. Joint tenancy — All owners have equal ownership shares, and if one owner passes away, their share automatically transfers to the remaining owners.
2. Tenancy in common — Each owner can hold a different percentage of ownership, and their share can be passed to heirs or sold.

Example:

Suppose two friends, Alex and Jamie, decide to co-buy a $400,000 home. Alex contributes 60% of the down payment and plans to cover 60% of the mortgage and utilities, while Jamie covers 40%. They draft a co-buying agreement outlining their contributions, responsibilities for yard work and shared spaces, and what will happen if either decides to move out. With the right structure and communication, the arrangement benefits both parties financially and logistically.

Financing a Co-Owned Home

Most co-buyers apply for a joint mortgage, meaning all parties are responsible for loan repayments. Lenders assess each applicant’s credit score, income, and debt-to-income (DTI) ratio when determining eligibility.

For guidance on securing a mortgage for co-buying, visit DSLD Mortgage to explore your financing options.

Co-Buying vs. Co-Signing ─ What’s the Difference?

Co-buying means all parties are co-owners and share both the rights and responsibilities of the home. Everyone’s name is on the deed and the mortgage. Co-signing, on the other hand, means someone (like a parent) helps a borrower qualify by backing the loan — but may not have any ownership rights. While co-signing can be helpful, it also carries financial risk for the co-signer, since they are legally responsible for repaying the loan if the primary borrower defaults.

Benefits of Co-Buying a Home

1. Increased Buying Power

With multiple incomes contributing to the purchase, co-buyers can qualify for larger mortgage amounts, affording better homes in desirable locations.

2. Shared Costs

Co-buyers split major expenses, including:

• Down payment
• Monthly mortgage payments
• Property taxes
• Home insurance
• Maintenance and repairs.

3. Easier Mortgage Qualification

For buyers with lower credit scores or limited financial history, co-buying with a financially stronger partner can improve mortgage approval chances and secure better interest rates.

4. Investment Potential

Some co-buyers treat homeownership as a stepping stone to future investments, building equity together before selling and profiting from appreciation.

5. Reduced Financial Risk

Shared financial responsibility means less individual burden if economic hardship arises, reducing the chances of foreclosure.

Challenges and Risks of Co-Buying

While co-buying offers many benefits, it also comes with challenges:

1. Financial Dependence

All co-buyers are legally responsible for the mortgage. If one person fails to make their payment, the others must cover the shortfall to avoid default.

2. Credit Implications

Missed payments or defaults impact all co-borrowers’ credit scores, making future borrowing more difficult.

3. Conflicts Over Ownership and Responsibilities

Disagreements may arise over:

• Home maintenance decisions
• Use of shared spaces
• Financial contributions
• Exit strategies (when one co-owner wants to sell).

4. Selling Challenges

If one person wants to sell, the process can be complex, requiring either a buyout or a joint decision to sell the property entirely.

Essential Steps for a Successful Co-Buying Arrangement

1. Choose the Right Co-Buyers

Before committing, ensure you share similar financial habits, homeownership goals, and expectations with your co-buyers.

2. Get Pre-Approved for a Mortgage Together

All buyers must meet lender requirements. Pre-approval will determine the loan amount you qualify for as a group.

3. Draft a Co-Buying Agreement

A legally binding agreement should outline:

• Ownership percentages
• Financial contributions
• Monthly payment responsibilities
• Home maintenance duties
• What happens if someone wants to sell.

4. Determine the Best Legal Ownership Structure

Work with a real estate attorney to decide between joint tenancy and tenancy in common based on your long-term plans.

5. Plan for the Future

Discuss exit strategies in advance:

• What happens if one owner wants to move?
• Can one person buy out another’s share?
• How will profits be divided if the home is sold?

Final Thoughts

Co-buying is an innovative and practical solution for those struggling to afford homeownership alone. By pooling resources, friends and family members can unlock greater purchasing power, share financial responsibilities, and achieve homeownership together.

However, it’s crucial to plan carefully, select the right co-buyers, and establish legal protections to ensure a smooth partnership.