Home ownership, a key aspect of the American Dream, holds more than just financial value. It significantly influences the dynamics of marriage and family life. Beyond being a symbol of stability and success, recent studies suggest that wealth can affect the strength and longevity of marriages, the security of family relationships, and broader societal issues such as economic inequality. We’ll dive into recent research that concluded home ownership, as a proxy for wealth, acts as collateral in marriage, providing security and encouraging investments that benefit both spouses and their children. In other words, the research argues that your marriage is stronger if you own a home.
This article explores the intricate relationship between marriage and home ownership. We’ll discuss how growing families can manage in today’s housing market, which feels out of reach for many, and offer actionable strategies for couples. By understanding these dynamics, couples can better navigate the complexities of marriage in today’s economic climate and build stronger, more resilient relationships.
Home Ownership as a “Collateralized Marriage” Obligation
Marriage is often viewed as a romantic union, but it is also a legal contract outlining the rights and responsibilities of both parties, particularly in the event of divorce. According to research by Corinne Low and Jeanne Lafortune, home ownership serves as a critical form of collateral in this contract, which they refer to as “Collateralized Marriage.” When a couple owns a home, this asset becomes part of the legal framework that determines the division of property during a divorce. This collateral provides security, enabling couples to take risks that benefit the family, such as one partner stepping back from their career to focus on raising children.
Moreover, marriage provides significant advantages for achieving home ownership, particularly through pooled financial resources and higher combined incomes. Married couples can more easily save for down payments, secure better mortgage terms, and afford homes in higher-quality neighborhoods. The math is straightforward: two is greater than one. This financial synergy allows them to better withstand economic challenges, contributing to long-term stability and the potential for building generational wealth. These factors underscore why married couples are more likely to achieve and sustain home ownership compared to their unmarried counterparts.
However, this security is not equally available to all couples. The research argues that those who can afford to purchase a home inherently have a stronger marriage contract because it includes this valuable collateral. In contrast, couples who remain renters or lack significant assets may find themselves in a weaker contractual position, making them more hesitant to invest in long-term relationship and family goals. One metric supporting this conclusion is the difference in home ownership rates: married individuals are over 30% more likely to own a home than renters. This has led to an increasing debate as to whether marriage is a luxury good and a class privilege.
The “Chicken or Egg” Dilemma: Marriage and Home Ownership
After reviewing the research, the “chicken or the egg” dilemma remains unanswered. Does marriage facilitate home ownership (e.g., having two incomes to support payments), or is home ownership an indication of a strong marriage? We speculate that looking at the correlation between home ownership and marriage is heavily influenced by survivorship bias. If home ownership defines a strong marriage, what about previous homeowners who have since divorced? Forty-three percent of first marriages end in divorce. The rate is even higher for second and third marriages, at 60% and 73%, respectively.
Although the research does not answer our ultimate question, the claim makes logical sense that on average home ownership may be an indication of a stronger marriage. But it may not be what you think. It doesn’t mean go buy a home to make your marriage stronger. It also doesn’t mean your marriage is strong because you own a home. Quite simply, it could be an indication that a couple is further along in their marital development. They have worked together to save for a down payment and have had discussions with a bank about the responsibilities and implications of taking on such a large financial commitment, typically the biggest of one’s life. This financial commitment requires both individuals in a marriage to be on the same page, providing them with further opportunities to develop their relationship. Lack of commitment is the #1 most common reason for divorce, occurring 73% of the time, and owning a home together could be an avenue to hedge against that risk indirectly resulting in a stronger marriage vs. another couple who has not yet had that experience.
A 2014 study, titled The Impact of Home ownership on Marriage and Divorce: Evidence from Propensity Score Matching, attempted to address this “chicken or the egg” question. The study set out to test two hypotheses:
- Single homeowners are more likely to delay marriage than single renters.
- Married homeowners are more likely to delay or avoid divorce than married renters.
The study’s findings support the idea that home ownership creates a stronger marriage. A home, typically a family’s largest financial expense and one that comes with sizable transaction costs financially (mortgage payment), physically (moving), and emotionally (memories), can act as a barrier to change, making people reluctant to divorce over the alternative of making things work. Compared with married renters, married homeowners were 60% to 69% less likely to divorce, supporting the idea that home ownership, an indication of wealth, may indeed create a stronger marriage. Interestingly, for single homeowners, the odds of getting married were 51% to 55% lower than for single renters. This highlights the added complexity of entering into a marriage with inequitable finances.
The Economic Realities of Buying a Home: Challenges for Modern Couples
The current economic landscape presents significant challenges for home ownership, especially for growing families that are still building their wealth. High mortgage rates, coupled with limited affordable housing, make it increasingly difficult for many people to purchase a home. On a median salary, it takes 5 more years, equivalent to 50% longer, to save for a down payment than it did 40 years ago. This financial pressure can profoundly affect their decisions about marriage and family planning.
In today’s market, your class of wealth likely has more to do with the timing of when you purchased a home than with any other factor. Those who bought homes pre-COVID and refinanced during the sub-3% COVID interest rates are likely in an envious position. Access to affordable childcare is another large expense that can be quite shocking and when combined with when you purchased your home would have an extremely high correlation with overall wealth or expense-to-income ratios. Basic childcare options cost $2,300 – $2,600 a month in our area and are likely increasing. Post-COVID, many childcare workers opted to leave childcare for restaurant work as restaurant workers benefited from tip inflation. This put significant upward pressure on childcare costs and led to even longer wait lists.
Research suggests that couples who face lower housing prices at the start of their relationship are more likely to marry and invest in their family. The security provided by home ownership allows them to take on risks that might otherwise seem too daunting, such as one partner taking extended parental leave. These decisions become easier when the couple knows their home—often their most valuable asset—is a safety net available in case of emergency.
In contrast, couples who remain renters may delay marriage or avoid it altogether until they feel financially secure enough to purchase a home. Even if they marry, the absence of significant assets like a home may make them more reluctant to take on risks that could benefit the family, such as one partner temporarily stepping back from their career to care for children.
Home Ownership and Family Planning
Home ownership—or the lack thereof—profoundly impacts marriage through its effect on gender roles and family investments. Traditionally, the woman often assumes the primary care giving role, potentially sacrificing career advancement. This dynamic becomes particularly risky without a strong marriage contract backed by assets like a home.
Without a home or other significant assets to fall back on, the caregiver is vulnerable in the event of a divorce. They may have left the workforce, possibly losing or delaying career advancement opportunities, without having an asset to protect themselves. If you’re a caregiver, consider this as you decide whether to stay home. The decision should never be made for you. If their marriage were to end, they could be at a financial disadvantage, having spent years out of the workforce. This risk is mitigated in marriages where the couple owns a home, as the value of the home provides financial security for the care giving partner.
Moreover, home ownership impacts the couple as well as their children. Research highlights that parents’ investments in their children—such as time spent on homework or educational activities—are influenced by the security provided by home ownership. Parents who feel secure in their relationship and financial situation are more likely to invest in their children’s “human capital,” a term economists use to describe the skills, knowledge, and experiences that contribute to a child’s future success. An easier housing market tends to correlate with a higher probability of children completing their grade each year without needing to repeat. In families where financial security is lacking, parents may be less able or willing to make these investments, potentially widening the gap between children from different socioeconomic backgrounds.
Actionable Strategies for Couples: Building a Strong Foundation
Given the significant impact home ownership can have on marriage and family life, couples should carefully consider their financial readiness before taking the plunge. Just because the data supports the idea that homeowners have stronger marriages, do not just go out and buy a home if you’re currently a married renter. Financial readiness includes having a solid savings plan for a down payment, maintaining a good credit score, and understanding the long-term commitment that comes with a mortgage. Couples should also consider their emotional readiness, ensuring they are prepared for home ownership’s responsibilities, including maintenance, budgeting, and potential financial strain during economic downturns. Here are some strategies couples can implement:
- Explore Alternative Forms of Financial Security: If buying a home is not an option, couples should explore other ways to create financial security within their relationship. This could include building a robust savings account, investing in stocks or retirement accounts, and setting clear financial goals together. These steps can provide a safety net similar to home ownership.
- Communicate Openly About Financial Goals: Regular discussions about financial goals and concerns can help couples align their priorities and make informed decisions. This includes budgeting, saving for major expenses, and planning for long-term financial stability. Open communication builds trust and strengthens the relationship.
- Consider the Timing of Major Life Decisions: Couples should consider the timing of significant life decisions, such as having children or one partner stepping back from work, in the context of their financial situation. Assessing whether they have sufficient financial stability to support these choices is crucial for long-term happiness and success.
- Seek Professional Guidance: Financial advisors can provide valuable insights and guidance tailored to a couple’s unique circumstances. They can help couples create a comprehensive financial plan that addresses their needs and goals, including strategies for achieving home ownership if desired.
- Invest in Relationship-Building Activities: Home ownership is just one aspect of a strong marriage. Investing in relationship-building activities, such as date nights, shared hobbies, and regular check-ins, can help couples maintain a strong connection regardless of their financial situation.
Social Pressures: Are You Feeling the Need to Keep Up?
In today’s world, social media and peer influences can create immense pressure to buy a home, making it seem like a necessary milestone for success and happiness. This pressure is something we experienced firsthand when our social circle began purchasing homes. The excitement was contagious, and it was easy to feel like we were falling behind.
However, as we engaged in conversations with friends who had recently bought homes, we discovered the hidden stress beneath the surface. Many shared the financial strain of making mortgage payments and the anxiety of living beyond their means to maintain appearances. This was a crucial lesson for us: while home ownership can be a symbol of success, it should not come at the cost of financial stability and peace of mind.
Realizing that our journey was unique, we chose to focus on what made sense for our family. We continued renting until we were truly ready, allowing us to build our savings and invest in other opportunities. This decision saved us from unnecessary stress and ensured we were well-prepared when we finally decided to buy a home. The key takeaway is that making decisions based on social pressure can lead to unwise choices, but taking the time to evaluate your readiness and prioritize financial health can lead to more sustainable success.
Conclusion: Strengthening Your Marriage with Financial Security
Home ownership plays a crucial role in the stability and success of marriages, providing a form of collateral that strengthens the marriage contract and encourages investments in family life. However, the current economic environment makes it increasingly difficult for many couples to purchase a home, potentially weakening the foundation of their relationship.
Remember, every couple’s journey is unique. Whether you own a home or not, the strength of your marriage lies in your ability to support and grow with each other through life’s challenges and opportunities. By taking proactive steps to create financial security within their relationship, engaging in open communication, and making informed decisions about their future, couples can help ensure that their marriage and family life are built on a strong foundation. In doing so, they can protect their financial future, create a nurturing environment for their children, and build a resilient relationship that can withstand the challenges of modern life.
Call to Action: If you found this article on marriage and home ownership helpful, you’ll want to check out our in-depth discussion answering the question “Are you ready to buy a house?” This article offers valuable insights and practical tips to help you determine the right time to take the plunge into home ownership. Read it here: Are You Ready to Buy a House? How to Make the Right Choice!
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