Homebuying is getting so expensive these days that engaged couples who are planning to marry are asking friends and family for contributions for down payments.
Data shows a growing number of couples are using online wedding registries for home-fund donations.
According to The Knot, the share of couples including "home funds" as part of their wedding registry has increased 55% since 2018. Now, nearly 20% of all couples registered on The Knot are asking their guests to help with the down payment on their first home.
"Home funds were one of the most popular wedding registry cash funds on The Knot in 2022 — the second, in fact, right behind the honeymoon fund," Esther Lee, deputy editor of The Knot, said in a statement.
The practice is known as "milestone gifting."
"While guests prefer to give cash gifts for celebratory treats, like a sunset honeymoon dinner, milestone gifting is a profoundly thoughtful and significant trend we're seeing among couples planning on The Knot," Lee said. "Amid rising interest rates and historic highs for down payments, this particular wedding contribution helps newlyweds reach another meaningful life milestone: homeownership."
Recent research from Zillow shows that half of all home buyers are purchasing their first home, the highest share that Zillow has ever recorded. Between 2018 and 2022, first-time buyers were at least twice as likely to report putting gift funds toward their down payment. And most recently in 2023, 43% reported gift funds from friends and family as the source of at least part of their down payment funds.
Affordability is the greatest hurdle facing first-time home buyers. It now takes nearly 12 years for a typical first-time buyer to save up for a down payment, compared to nine years prior to the pandemic. Meanwhile, the typical monthly mortgage payment has more than doubled in that time. For a $350,000 home and assuming a 20% down payment, a couple would need to come up with $70,000 for a down payment and expect to spend $2,334 a month on a mortgage payment, according to Zillow.
"Young couples may be eschewing convention when it comes to their weddings, but they still aspire to achieve the age-old American dream of homeownership," said Amanda Pendleton, a personal finance expert at Zillow Home Loans.