Co-ownership on the rise as housing affordability vexes buyers

By Jeff Lazerson | jlazerson@mortgagegrader.com | MortgageGrader.com

Article originally posted in Orange County Register on October 29, 2026

Six years ago, it took 14 years for the median Los Angeles renter household to save up enough money to buy a home. Today, it takes 24 years of savings to buy, the highest among the nation’s largest metro areas.

That savings estimate comes from a study published Oct. 22 by the Julian Bond Institute at the Center for Responsible Lending.

On your own (without the bank of mom and dad, for example) the reality of traditional homeownership is farther out of reach as the housing economy keeps moving the goalposts. The share of first-time homebuyers in the U.S. fell to a record low 21% in 2025, according to the National Association of Realtors.

Figures from NAR’s 2025 survey indicate the median age of those first-time homebuyers was 40. Personal savings accounted for 59% of the down payment, 26% came from retirement funds, stocks or cryptocurrency and 22% were gifts from family and friends.

There are various first-time homebuyer programs offering mortgages with zero down payment. All of them have some limitations, such as maximum loan amounts and income limitations. Many offer higher interest rates than standard mortgages in exchange for the lender covering the down payment and closing costs. That said, it does work for some.

So, what if a buyer were to take their meager down payment resources and buy a home with someone else, or several people for that matter? This is called co-buying followed by co-owning once the sale is complete.

The co-buying concept is trending.

In 2026, 31.5% of U.S. home purchases involve co-buyers, compared with 21.8% in 2021. A 2026 report by CoBuy estimates 64 million Americans co-own a home with someone who is not their spouse. The average co-owner group is 3.7 people. And yes, co-buyers can be family, such as co-founders of CoBuy who are mother and son.

Before I dig into the more granular details of co-buying, I want to first point out that this concept is very different from having a co-signer.

According to Fannie Mae, a co-signer has no ownership interest in the property and is not named on the property title or security instrument (in California the security instrument is called a deed of trust).

A co-signer must sign the promissory note to guarantee the debt, lending their credit or income to help the primary buyer qualify. The co-signer shares joint liability for the mortgage. If the primary borrower misses payments or defaults, the co-signer is 100% legally responsible for paying the debt, and it will harm their credit score.

Separately, you can also have a non-occupant co-borrower who shares the ownership interest and all its benefits and liabilities. Co-borrowers are usually parents or relatives who choose to invest with their children, siblings, etc.

According to Neighbors Bank, people choose co-ownership for many reasons, including:

—Splitting the down payment and closing costs

—Qualifying for a larger mortgage by combining incomes

—Sharing monthly housing expenses

—Building equity instead of renting

—Purchasing a multi-generational or shared living arrangement with siblings or relatives

—Inheriting a property as a co-owner

First and foremost, you need to have a written agreement organized through an attorney (be sure the attorney is well versed in co-buying and co-owning agreements) that addresses everything from soup to nuts.

Here are just some topic examples: what type of ownership (usually its tenants in common), ownership percentages, funds for down payment, closing costs, monthly mortgage payment responsibilities, mortgage interest and property tax deductions, utilities, upkeep, repairs and maintenance, general disputes (home insurer cancels because one co-owner has a pitbull…what to do?), necessary or unnecessary capital improvements, emergency expenses, co-buyer defaults (say someone loses his or her job), property usage (everything from overnight guests to who gets the primary bedroom), exit strategies and property valuation disputes, timelines for resolutions in respect to disputes, etc.

Something else: Separately each co-buyer should have a trust or a will. If any of the co-buyers don’t have one, then get one done by a trust attorney.

What happens if a co-owner dies without a trust or will?

“Generally, if a tenancy in common co-owner dies without a trust or will, this will have to go through the probate process,” says attorney Mike Hensley. “If the surviving co-owner wants to sell or refinance the property, he or she will be stuck until the probate is completed. It’s going to probably take a minimum of eight months or over a year to complete probate.”

My own co-owner story dates to 1978 when my dad, one of my siblings and I came up with $10,000 to purchase a four-bedroom home in Anaheim for $82,000.

My sibling was a co-owner with me, and my dad was a co-borrower. We each owned 33%. We rented out two of the bedrooms to some friends to help offset the house payment.

Co-ownership worked out fabulously and one big boost came eight years later (during the Jimmy Carter inflation years) when the home value soared to $160,000.

Most family and generational wealth start with homeownership. You buy and then watch the value go up (and down) over time.

In my family’s situation, a written agreement was never on our radar, but it all still worked out fine. That said, be very careful who you are dealing with if you elect not to make the effort and spend the money to put an agreement together. I see no need for an agreement if you are co-buying with your significant other. But that’s just me.

One last thought. If it is all possible, first rent for one year with whoever your potential co-buyer(s) is. That way, you’ll learn quickly if you can get along with each other (both personally and businesswise) when you buy together.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com. His website is www.mortgagegrader.com.

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