There are a lot of strategies out there for becoming a homeowner, but one often overlooked approach is co-ownership. Not only does this cut homeownership costs in half (or thirds!), but it leaves you with more money in your bank account each month.
What is a co-ownership home?
- Buying a home with one or more people (such as friends, family, or a business partner) to share homeownership costs.
- Co-owners have shared rights and legal responsibilities of the home.
- All owners hold a portion of ownership in the home, building equity together.
- Homeownership becomes more accessible by reducing the individual financial burden.
To better demonstrate the financial advantages of co-ownership, Zoocasa analyzed monthly mortgage payments in 50 U.S. cities, based on the median single-family home price in each, and calculated how much a mortgage payment is reduced by having one or two roommates/co-owners.
Average monthly mortgage payments were calculated assuming a 20% down payment and a 30-year fixed-rate mortgage of 6.64%. Median home prices were sourced from the National Association of Realtors.
Most Affordable Cities for a Co-Ownership Home
Even in America’s most affordable cities for home buying, monthly mortgage costs can account for over 25% of a homeowner’s monthly income. Investing in a co-ownership home could cut expenses down to under 10% of an owner’s income, freeing up cash for other purchases.
In Cleveland, a solo buyer’s monthly mortgage payment drops from $1,138 to $569 when co-buying with one partner — and falls even further to $379 with two co-owners. This comes out to $9,108 in annual savings, enough to pay for two holidays in the Bahamas.
Buyers with lower incomes can especially benefit from co-ownership. In New Orleans, the median income of $61,000 (one of the lowest on our list) limits the buying power of a solo buyer, requiring them to spend 29% of their income on mortgage expenses. Adding a co-owner cuts that burden in half — dropping it to just 14.5%, or less than $500 a month.
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Similarly, in El Paso, Greenville, and Birmingham, solo buyers need to spend close to 30% of their income on mortgage costs. But with two co-owners, this drops to under 10%. With monthly expenses averaging under $600, homeowners would pay even less than if they were renting.
Save Over $20,000 Annually By Co-Owning in These Cities
While a $153,202 salary might sound like a lot of money, it is hardly enough to buy the median-priced home of $1,920,000 in San Jose. But you don’t need to earn millions to afford a home in Southern California.
If three friends pool their resources and invest in a San Jose home together, their monthly mortgage costs can decrease from $9,850 to $3,283. For someone earning $153,202, this represents 25.7% of their income, aligning with the U.S. Department of Housing and Urban Development’s definition of affordable housing, which advises that no more than 30% of income should be spent on housing costs.
Through co-ownership, first-time buyers can enter traditionally out-of-reach real estate markets like Miami, Washington D.C., and New York. In 19 of America’s most expensive cities, sharing costs with two other people can reduce housing expenses from over 30% of the median income to under 20%.
This translates to thousands of dollars in annual savings. In Los Angeles, solo buyers will save $38,568, while solo buyers in Seattle and Boston will save just over $30,000 a year by adding two co-owners. A homeowner could use this extra cash to splurge on a new car, invest in the stock market, or save for a down payment on a future property.
How a Co-Ownership Home Can Free Up Your Budget for Bigger Goals
Buying real estate with a co-owner makes housing more affordable, opening the door for more people to access housing, build equity, and invest in their future. But co-ownership can open other financial doors, too. Money that would’ve gone toward a mortgage can now be redirected to other necessities or goals.
For instance, even by having just one co-owner, a median-income earner in multiple cities, including Seattle, Austin, and Boston, would be able to cover the cost of in-state tuition for one year with their annual mortgage savings.
Here’s how much median-income buyers could save annually by co-owning, compared to the average cost of in-state tuition.
| City | Annual Mortgage Savings with One Co-Owner | Average Cost of In-State Tuition |
|---|---|---|
| Riverside, CA | $18,390 | $8,637 |
| Sacramento, CA | $16,930 | $8,637 |
| New York, NY | $21,809 | $8,575 |
| Seattle, WA | $24,174 | $8,006 |
| Austin, TX | $14,354 | $8,195 |
| Boston, MA | $22,647 | $14,345 |
| Salt Lake City, UT | $17,561 | $6,764 |
| Miami, FL | $19,547 | $4,541 |
| Denver, CO | $20,036 | $9,798 |
| Portland, OR | $18,140 | $12,424 |
| Providence, RI | $15,274 | $14,744 |
| Phoenix, AZ | $14,665 | $11,768 |
Over the course of five years, a Boston co-owner could save approximately $113,000. With an additional co-owner, the savings jump up to $150,980, more than enough to cover the down payment on a single-family home. Besides funding higher education or real estate endeavors, homeowners could also use the mortgage savings on a brand-new car, a premium gym membership, or a dream vacation.
While some might put their savings toward lifestyle upgrades, others may prioritize long-term financial security. With the cost of living continuing to rise, many Americans could benefit from using extra cash to build retirement savings or pay down debt. According to LendingTree, total credit card balances reached $1.211 trillion in the fourth quarter of 2024. Co-owning a home offers a way to enter the market more securely while still freeing up room in the budget to tackle high-interest debt.
Here’s how much median-income buyers could save annually by co-owning, compared to the average credit card debt in Q1 2025 in their respective state.
| City | Annual Mortgage Savings with One Co-Owner | Average Credit Card Debt |
|---|---|---|
| Cincinnati, OH | $9,121 | $6,345 |
| Memphis, TN | $8,570 | $5,652 |
| San Antonio, TX | $9,681 | $8,042 |
| Indianapolis, IN | $9,792 | $6,214 |
| Raleigh, NC | $14,043 | $7,069 |
| Sarasota, FL | $14,776 | $9,000 |
| Las Vegas, NV | $14,788 | $7,797 |
| Bridgeport, CT | $21,459 | $9,201 |
| Los Angeles, CA | $28,926 | $9,096 |
| San Francisco, CA | $40,498 | $9,096 |
Important Considerations Before Co-Owning a Home
Like with any major life decision, you should research carefully before jumping in headfirst. To ensure the success of co-ownership, all parties involved must agree on the financial obligations prior to purchasing. The last thing you want is to get stuck paying for more than what you signed up for. For added peace of mind, hire a lawyer to draft a legally binding contract.
Buy with people you trust, have open and honest conversations on potential ‘what ifs’ (ie. what happens if one of you loses a job?), and set up house rules in advance to deal with disagreements. If you’re uncomfortable discussing finances with your co-owners, they might not be the right fit. Upfront communication helps you avoid future headaches.
Co-ownership can be an excellent pathway to financial stability if done with the right people. Working with an experienced real estate agent can help alleviate the stresses of homebuying and set you up for success. Ready to explore your options? Connect with a real estate expert to learn how co-ownership could bring your homeownership goals within reach.
