More Millennials Buying a Home Before Tying the Knot

Tying the knot doesn’t always come before signing a mortgage these days.

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When it comes to big relationship milestones, tying the knot typically comes before applying for a mortgage.

Not anymore.

An increasing number of young couples in committed relationships are forgoing wedding vows before taking the homeownership plunge, with almost a quarter of now-married millennials saying they purchased a home with their current spouse before their wedding, according to Coldwell Banker's Marriage and Homebuying study. By comparison, just 14 percent of those 45 and older purchased a home with their current spouse before marriage.

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Some of it has to do with the fact unmarried couples are increasingly likely to live together before marriage. From 2006 to 2010, 48 percent of American women between the ages of 15 and 44 said they lived with a romantic partner without being married, according to a recent report from the CDC. Back in 1995, that figure was just 34 percent.

Younger couples are even forgoing flashy engagement rings and lavish wedding celebrations in favor of putting a down payment on a home, according to Dr. Robi Ludwig, a leading psychotherapist and Coldwell Banker lifestyle correspondent.

"The boundary of needing to be married before purchasing a home has been broken," Ludwig says. "The younger generation seems to be a bit more realistic in that they are getting married later but want to plot out their life and prepare for financial realities."

Those "financial realities" have been brought into sharp relief over the past several years as the financial crisis and housing bust wracked the nation's economy. Now that things are on the mend, Americans – particularly the younger generation – have started to realize that they need to build a safety net, and with low mortgage rates and relatively affordable home prices, real estate has once again become a savvy investment for many, including millennials.

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Despite how younger generations are branded – slow to grow up, fast to rack up debt – millennials are actually very pragmatic when it comes to buying a home, Ludwig says. Not only are they cognizant of the fact that current real estate market conditions could be a once-in-a-lifetime opportunity, but they are bolder when it comes to making big financial decisions.

"It requires you to be financially transparent and you have to have the maturity and forethought to say 'What do you want in the next five, 10, 15 years?' going into homeownership," Ludwig says.

The homebuying trend among unmarried millennials isn't the same across the country, and the survey calls out certain regional variations. Younger couples in the Northeast and Midwest are much more likely to purchase a home before marriage than those in what Ludwig characterizes the more-traditional South. Couples there tend to get married earlier and therefore tend to be not as financially secure.

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But it's likely much of this trend would have emerged without the financial crisis and housing bust, Ludwig says. Thanks to lower home prices and affordable mortgage rates, homeownership has become increasingly within reach for younger couples.

"There's been this embracing of an opportunity," Ludwig says. "If, say, mortgage rates weren't as attractive, [homeownership] wouldn't have been as much of possibility for the younger generation."

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