As home prices continue to outpace wages, more Millennial and Gen Z buyers are exploring co-buying a home with a friend, roommate, or partner, as a faster and more affordable path to ownership.

The idea is simple: combine incomes to qualify for a better home, split ongoing costs and build equity instead of “throwing money away” on rent. This arrangement, however, can get complicated quickly.

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Shared mortgages come with shared risk and even strong friendships can strain when money, life changes or unexpected repairs enter the equation.

Local Arizona realtor and member of HomeSmart’s Elite Team, Andrea Scheppe, talks the possible pros and cons of co-ownership for young buyers.

Pros

  • Affording a better home or a more desirable area: “Friends are pairing up and being like, ‘Hey, you know, I trust you. You trust me. Let’s both qualify and both be on the loan and the title and buy a home together.’ That way they can afford to live in an area that’s more desirable than if they were to qualify on their own,” says Scheppe.
  • Fosters path to homeownership through higher qualification: “It is a faster path to home ownership for many single people or unmarried couples because our home prices have outpaced a lot of people’s income, so co‑buying does let friends and partners qualify sooner than they could alone by combining multiple incomes for qualification,” says Scheppe.
  • Building equity: “Co‑buying lets both friends build equity instead of just being tenants somewhere. You’re not paying someone else’s mortgage anymore, you’re building your own,” says Scheppe.
  • Sharing financial burden: “With co‑buying, you share the financial burdens of homeownership. If something big breaks, like the AC, you can split the cost,” says Scheppe.

Cons

  • Formal legal agreements: “You have to protect yourself with a co‑ownership agreement. People change, life changes, you don’t know how someone will act if something happens, so you want a real estate lawyer to spell everything out,” says Scheppe.
  • It can feel like renting, but it’s not. It’s a shared responsibility: “Co‑buying can feel like renting with a friend, but it’s not, you’re both on the hook for the mortgage, the credit risk, everything. You’re in it together.,” says Scheppe.
  • Complexity in determining “fairness”: “Co‑buying sounds simple until you sit down and decide what’s ‘fair.’ Who owns what percentage, who pays which bills, where the down payment comes from and what happens if someone loses their job. It stops being just a friendship and becomes a business arrangement,” says Scheppe.
  • Life events can change circumstances: “You have no idea what the future holds, job loss, a breakup, a death in the family. So many things can happen in life, and co‑buying can suddenly shift from a friendship to a business arrangement,” says Scheppe.