What is Co-Buying?
Co-Buying is the process of purchasing a house with two or more people in the pursuit of homeownership. Not everyone can afford a house these days and with the constant increase in inflation it becomes even more difficult to achieve. One must also consider the amount of insurance fees, maintenance costs, and taxes. That can be alot for one person to handle, so co-buying works as a stress reliever and means of shared equity.
Why Are Homes So Expensive?
The increase in price we have seen in the housing market is do to multiple factors but one that seems to almost be running unchecked and is also being enabled by our government is the mass purchasing of homes by hedge fund companies. Forbes.com states that the amount of homes for sale on a given day in february has gone down 24.5% percent from last year (https://www.forbes.com/advisor/mortgages/why-houses-are-expensive/). After the 2008 recession president Obama put the “Home Affordable Modification Program in place to help 4 million people with a $75 billion buyout but it didn’t work and 9 million lost their homes. The issue is that after these people lost their homes hedge funds would buy them out, sell them at a 30-50 percent lower price, and rent them out. As housing prices increased, the apartments around them increased in rental price as well. (https://peoplesworld.org/article/how-the-government-helps-wall-street-landlords-convert-family-homes-to-rentals/)
Proposition 13 is a piece of legislation that was put in place in california to protect homeowners from higher tax rates but instead fueled the government to do the exact opposite which was lower the incentive for the government to build affordable housing and instead focusing more on a gas station or mechanic which had higher gains in property taxes. Bills like this are being used all over the country and the main way they succeed is in making sure you do not know about it.
How Does Co-Buying Protect Against Increasing Housing Costs?
As time goes on co-buying will become a more common practice because of how our society is designed around equity. It is becoming harder and harder for the middle class to break into the housing market and this is an issue because passing down homes from a parent to child is one of the main ways members of the middle class build equity. Co-Buying allows you to get an earlier start on building that equity with others without having to handle all of the risk on your own, as no one wants to get stuck with a home loan they cannot pay off.