Should You Buy a Home With a Friend or Family? Here Are the Pros and Cons

Buying a home with a friend or family member can offer significant benefits, especially when high home prices and mortgage rates might otherwise prevent you from becoming a homeowner. By pooling resources, you may increase your access to housing opportunities and reduce your financial burdens.

However, co-buying a home is a legal and financial commitment that requires careful consideration. Keep reading to learn the pros and cons of buying a property with a friend or relative so you can make an informed decision.

An Increasingly Popular Trend

In 2023, 21% of homebuyers co-bought with a friend or family, meaning more than one in five homebuyers purchased with a non-spousal partner. While slightly less common in 2024, the strategy remained popular, accounting for 15% of purchases.

That may reflect a rise in affordability challenges as housing prices increasingly outpace wage growth. In 2022, the median sales price for single-family homes rose to 5.1 times the median household income, up from 4.1 in 2019 and an average of 3.2 in the 1990s.

At the same time, interest rates soared, with 30-year fixed mortgage rates more than doubling from 2.65% at the start of 2021 to 7.08% by October 2022. They’ve remained stubbornly high, peaking at 7.79% in October 2023 and staying above 6% throughout 2024.

Facing these financial hurdles, more homebuyers may be turning to friends and family for support, particularly those without spouses or partners.

“It’s not easy to buy a house in today’s situation, especially in certain areas of the country,” said Lawrence Sprung, CFP, author of “Financial Planning Made Personal,” and founder of Mitlin Financial. He noted that with home prices, homeowners’ insurance, taxes, and financing costs all going up significantly, “There’s definitely a reason to drive the phenomenon of co-buying.”

Pros of Buying a Home With a Friend or Family

Buying a home with a friend or relative can have many benefits. Here are some of the most significant ones to consider.

Increased Property and Location Opportunities

Partnering with a friend or family member can expand your homebuying opportunities. In some cases, it may be the only viable way onto the property ladder—allowing you to build equity and benefit from asset appreciation—since financial constraints make purchasing property alone impossible for many.

For example, in September 2024, an annual income of about $231,000 was necessary to qualify for a mortgage on a mid-tier California home. That’s more than three times the state’s median annual income for single-earners that year ($74,819).

Even if you could buy a home on your own, co-buying may help you secure a more desirable property. “Qualifying for a larger loan or a nicer property might be possible because you’re combining incomes,” said Douglas Boneparth, CFP, founder of Bone Fide Wealth and co-author of “The Millennial Money Fix.”

Shared Costs and Financial Responsibilities

Pooling resources can reduce the financial burdens of homebuying. “It would speed up the process of saving for a home,” said Boneparth. “Two or more people stashing away cash is a lot faster than doing it alone.” Beyond the down payment, “You get to split the mortgage, property taxes, homeowners’ insurance, and maintenance costs. It can make it more affordable.”

The same applies to recurring expenses. If your prospective property’s ongoing costs were $4,000 per month, splitting them with a co-buyer could mean only being responsible for $2,000 apiece.

Built-in Community, Convenience, and Support

Buying a home with a friend or family member offers more than financial advantages. It can also provide a sense of connection that may be invaluable when navigating the challenges of homeownership, especially for first-time homebuyers.

Sprung said, “We’re hearing a lot these days—especially post-COVID—about this phenomenon around loneliness and people not feeling community.” Younger, single adults are particularly susceptible. Thirty percent of Americans aged 18-34 report feeling lonely daily or several times a week, and single people are nearly twice as likely as married couples to experience weekly loneliness (39% versus 22%).

Co-buying with a trusted friend or relative may prevent or alleviate feelings of isolation. “You have someone else that can help with chores, repairs, even emotional support,” said Boneparth.

Potentially Better Mortgage Terms and Qualification Chances

Jointly applying for a mortgage can increase your chances of securing financing and more favorable loan terms. “Lenders are going to be more willing to underwrite a larger mortgage when there are more parties involved and more sources of income,” said Boneparth.

However, that’s dependent on your co-borrower’s annual income, outstanding debts, and credit history. While a partner with a healthy financial profile and credit score could strengthen your application, a less qualified co-borrower could undermine your efforts, potentially even resulting in a higher interest rate.

Additionally, some lenders may have reservations about approving loans for co-buyers who aren’t married or closely related, though they can’t legally discriminate based on the existence or absence of a marital relationship.

“If one person is putting their name on the mortgage and just relying on their partner to financially support it, that’s a really lopsided relationship,” said Boneparth. “Everything would be stuck on that one person.”

Cons of Buying a Home With a Friend or Family

Co-buying with a friend or relative also has some significant risks and potential drawbacks. Here are the primary ones to consider.

Increased Risk to Credit and Finances

Co-buying a home entangles your credit and finances with your partner’s, putting both at risk. “If your co-buyer flakes out, goes bankrupt, dies, or has any number of financial hardships, you could be left holding the bag,” said Boneparth.

Co-buyers are typically liable for the entire mortgage, not just the portion they’ve mutually agreed to cover. If your partner stops paying and you can’t make up the difference, it could result in foreclosure, significantly damaging your credit. If the foreclosure sale doesn’t cover the mortgage balance, your lender could also pursue wage garnishment or liens on your other property.

Because of these risks, Boneparth and Sprung stress the importance of planning for worst-case scenarios. When asked how he’d advise a client planning to co-buy, Sprung said: “We would want to make sure that regardless of whether the other person was going to be involved, they could potentially support most of the mortgage on their own, or at least support it through a transition period where they would look to sell the home.”

Potential for Disagreements

Co-buying with a friend or relative means every major decision requires agreement between two people who might not be as compatible as spousal partners. Even before purchasing, you may struggle to align on matters like the ideal type of property or location, slowing down your ability to execute. 

Once you move into the property, new challenges arise. Disagreements over household maintenance can create tension, whether over routine issues or larger concerns, like which HVAC technician to hire. Similarly, one person may want to sell their portion or move out while the other wants to stay.

It can be tough to resolve these disagreements. Compromises may be necessary, potentially leaving one or both parties less satisfied, which can be dangerous to your arrangement. “Any time you start building resentment between partners, you’re walking down a precarious path,” said Boneparth.

Risk to Personal Relationships

Mixing financial and personal matters can be tricky. Financial stress, unequal monetary contributions, or spending disagreements could negatively affect your relationship with your co-buyer.

Even if things work out well, navigating co-ownership for years—compromising on decisions, dealing with unexpected costs, and sharing spaces—can take an emotional toll. Minor conflicts may accumulate, potentially resulting in feelings of discontentment.

Should You Buy a Home With a Friend or Family?

Only co-buy with a friend or family member after careful due diligence. Here’s what to do before moving forward.

Assess Long-Term Compatibility

Before committing to a co-buyer, have multiple conversations about matters, like location preferences, lifestyles, and expectations for how long you’ll stay in the property. It’s also worth exploring how co-buying might affect your other relationships.

Beyond personal compatibility, financial transparency is essential. Exchange credit reports, disclose debts, and lay out income sources so there are no surprises. “You should be at a point where you’re comfortable exchanging that information,” said Sprung. “The last thing you want is to buy a house together and end up in a mess, financially or otherwise.”

Draft a Co-ownership Agreement

Once you’ve chosen a co-buyer, create a binding co-ownership agreement that outlines the legal terms of your partnership. For example, it should cover details like:

• How you’ll share financial responsibility for shared costs, like the mortgage
• What happens in the event of disagreements, like only one person wanting to sell
• The ownership structure, such as joint tenancy or tenancy-in-common

“Get these things hammered out before you enter into any kind of agreement or sign any mortgage application,” said Boneparth. “Lay out what recourse is available to you, so if things get heated down the line, you took care of that beforehand.”

Consider the Alternatives

Becoming a homeowner can improve your quality of life and help build long-term wealth, but that doesn’t mean co-buying is always worth it. If you don’t have an ideal partner, consider waiting until you find someone more suitable.

It may be better to rent indefinitely than to enter into a co-ownership arrangement that puts you at risk of overburdening yourself financially, navigating constant conflict with your co-buyer, or damaging personal relationships.

“Homeownership used to be the American dream because people would buy a home in an area, then work in that area for 20, 30, or 40 years,” said Sprung. “Their community and where they worked were very similar places. In today’s day and age, that’s not the case.”

The Bottom Line

A co-buyer can help you overcome the barriers to successful homeownership. However, consider carefully before partnering with a friend or family member, as it may put your credit, finances, and personal relationships at risk.

Find a qualified, trustworthy co-buyer who aligns with your lifestyle and other expectations. Insist on financial transparency and sign a legally binding co-ownership agreement before shopping for a home. If you can’t meet these conditions, it may be better to pursue alternative living arrangements.