December 1, 2022

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US couples ask wedding guests for help with mortgage downpayments

As they prepared for their wedding this year, New Yorkers Alexa Feneque and Silvio Tellez kept their list of desired gifts brief. Forgoing the usual hand towels and salt shakers, they asked their guests for just one thing.

“We are working so hard to save for our first home and any contribution towards that will always be sincerely appreciated,” they wrote on their online wedding list, or registry as is it known in the US.

The request netted the couple roughly $30,000, and underscored a trend — the growing use of wedding registries to raise funds for mortgage downpayments as US housing costs soar.

“We’re in the midst of house hunting now,” said the new Mrs Tellez, 29, a bank analyst who lives in the Long Island suburbs of New York City with her architect husband. “We didn’t really have anywhere to put all the stuff that we would have gotten if we would have done a registry.”

Wedding planning web sites such as Zola and The Knot say couples are increasingly tapping their wedding guests for cash to cover housing or other expenses rather than asking for household items.

At Zola, which has been used by more than 2mn couples since launching in 2013, 75 per cent of users ask for cash. The number of housing-related cash funds on the site has doubled since 2019.

The Knot, which surveys more than 300,000 US brides, grooms, guests and wedding professionals annually, said funds to cover new homes or renovations were up 10 per cent this year, making them the second-most popular cash funds after those for honeymoons. The value of contributions to housing-related funds surged 79 per cent this year, it said.

Line chart of average payments on new mortgages in August rose  43% to $1,839 from last year showing Median payments on new mortgages have surged

“With everything that we’ve experienced when it comes to inflation and the housing market, people are really reflecting on how they want to use their registry,” said Esther Lee, deputy editor at The Knot. “The savvy couples now know that they can use their registries to put down that cash for their future home.”

Historically, home ownership is closely correlated with marital status as couples settle down and start families. The home ownership rate among married couples was 79 per cent in 2020 compared with the national average of 66 per cent, according to US census data.

Newly-weds starting their home search this year after the busiest wedding season in 40 years have to deal with both record home price appreciation during the pandemic and rising interest rates.

Mortgage rates have more than doubled since the start of the year as the Federal Reserve has hiked benchmark rates to tamp down inflation. The average 30-year fixed-rate mortgage hit a 14-year high of 6.29 per cent in the week ending Thursday, up from an average of 2.88 per cent last year, according to Freddie Mac.

Alexa Feneque and Silvio Tellez asked guests at their wedding for just one thing — cash © Imagine Studios

The median monthly payment on mortgage applications in August was $1,839, up 43 per cent compared with a year ago, according to data from the Mortgage Bankers Association.

Wedding guests seem to recognise the hurdles facing newly-weds looking for a home to call their own. They contribute an $175-$200 on average to housing funds, compared with an average $100-$175 for honeymoon funds, according to data from Zola.com.

 “Guests really want to give to these new home funds and they’re willing to give just a little bit more to help out a couple get that first home,” said Zola spokeswoman Emily Forrest.

Camille Hemming (née Clifford), a 31-year-old brand manager from Michigan, said she and her husband raised $10,000 for a mortgage downpayment last year through their wedding registry. The couple originally tied the knot during a socially distanced pandemic ceremony with 12 guests in August 2020, and then did it again with nearly 200 people and a steel drum band in 2021.

Roughly one-third of the guests contributed to the cash fund instead of buying one of the more traditional gifts on the couple’s registry such as an All-Clad cookware set, Hemming said.

“A wedding is one of those few times when you get a lot of gifts and people are ready to invest in you and your future as a couple,” she said.

Cash funds are often more practical for modern couples, who tend to marry later and finance the majority of wedding expenses on their own. Nearly three-quarters of couples on Zola said they were saving for a new home at the same time they were paying for their wedding.

Tellez said she was encouraged to see listing prices for homes in her neighbourhood start to fall, but said market fluctuations had little influence on her timeline. She waited two years after getting engaged to marry her fiancé in February and hopes to buy a home by the end of the year.

“We don’t want to hold off any longer,” she said. “I’m just trying to start my life. I want to be able to start a family and move on.”