More Unmarried Couples Buy Homes Together

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WSJ Your Money Briefing 8 min 3 speakers 6 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

J.R. Whalen 0:05
Here's your Money Briefing for Wednesday, November 4th. I'm J.R. Whelan for The Wall Street Journal. The U.S. housing market is hot. Sales reached a 14-year high last month as families ventured away from big cities in search of more open space. Among those buyers are a growing number of unmarried couples. And while buying a house is always a complex process, entering into a sale as unmarried partners requires an extra level of diligence.

How has the share of unmarried couples buying homes changed in the last 20 years?

Veronica Dagher 0:30
you really want to get a deep dive in each other's finances. So if you haven't already, talk about how much you make, what are your expenses, you know, share that, those finances with full transparency, including any debts you have.
J.R. Whalen 0:45
But there are benefits too. Coming up, our personal finance reporter, Veronica Dagger, will explain how the closing process and taxes are different for unmarried homebuyers. Plus, you'll hear directly from a woman in Ohio who recently bought a house with her boyfriend. That's after the break.
J.R. Whalen 1:07
For many couples, buying a house is a personal finance milestone. But there's no rule saying a couple has to be married to buy a home together. The number of unmarried homebuyers has been rising sharply in recent years. And our personal finance reporter, Veronica Dagger, is here to discuss all the pros and cons that come with it. Veronica, thanks for being here.
Veronica Dagher 1:24
Thanks for having me, JR.
J.R. Whalen 1:26
So when it comes to unmarried couples buying homes, what kind of numbers are we talking about?
Veronica Dagher 1:31
So as you know, U.S. home sales are on the rise. They just hit a 14 year high. Families are looking to leave the cities and they're in search for larger spaces to quarantine because they know they're going to be there for a while. And we're hearing more unmarried couples are considering buying a house together. And according to the U.S. Census Bureau, the number of unmarried partners living together nearly tripled in the last two decades to 17 million.

What financial transparency should partners discuss before buying a house together?

Veronica Dagher 1:57
with a notable increase among those age 65 or older.
J.R. Whalen 2:02
So when unmarried people decide to buy a place, the first part of the conversation has to be, you know, can we afford it?
Veronica Dagher 2:08
And before you even get to that point of buying a house together, you really want to get a deep dive in each other's finances. So if you haven't already, talk about how much you make, what are your expenses, you know, share that, those finances with full transparency, including any debts you have. You want to get a really good sense of your partner's financial situation because if you're going to be buying a home with someone, that's a massive purchase. You really want to know as much about that person as possible because this is such a big decision.
J.R. Whalen 2:41
Well, let's get a first-person perspective on this. We're joined now by a special guest. Britta Kepf and her boyfriend recently made that decision to buy a house. They live in Brooklyn Heights, Ohio. Britta, thanks for joining us.
Britta Koepf 2:52
Oh, thank you for having me.
J.R. Whalen 2:54
So once you and your boyfriend decided to buy a house, what was the money discussion like?
Britta Koepf 2:58
Once we did decide to go to the next level of actually buying a house together, we were able to figure out how much we could each afford to put in to a pot of money to buy the house. When we decided how much was good to spend, we wanted to keep it lower than the amount that we were paying in rent, plus setting aside for down payment. is what we told each other. I have, as a financial advisor, I have more detailed ways of actually deciding how much someone can afford. But that is generally our mindset when we were talking about it is we don't want our expenses plus additional house savings. We don't want that to go up. We don't want us to move into a house and suddenly have to cut back other places or worry that our expenses
Britta Koepf 3:56
emergency fund isn't enough.
J.R. Whalen 3:58
Now, is it just you and your boyfriend in the house?
Britta Koepf 4:00
It's actually not. We are renting out a room to his brother.
J.R. Whalen 4:03
Oh, okay. So what's your advice to folks in your position? You know, two people not married who want to buy a house together.
Britta Koepf 4:10
When the bank tells you how much you can afford, they're not actually telling you how much you can afford.

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