Divorced And Under One Roof: The Toll Of Rising Housing Costs

Divorced And Under One Roof: The Toll Of Rising Housing CostsDivorced and separated couples face a difficult situation – being compelled to cohabitate due to today’s challenging housing market. With mortgage rates over 7% and home prices at record highs, many cannot afford to establish two households post-split. Their existing home likely has a sub-3% rate, impossible to find now. Renting is not always viable either since the recent sharp rise in rents.

So estranged spouses stay together to survive financially, though the emotional toll can be immense. Understandably, most keep this arrangement private, they aim for civility, especially if children are involved, while anxiously awaiting an improved market so they can separate.

One divorced couple faces a difficult situation, stuck in an unaffordable home together. In July 2022, they took out a $600,000 mortgage with a 5.62% rate, planning to refinance later.

Now seeking divorce, their home value dropped so neither can afford the payments alone. Unable to afford the mortgage, the estranged spouses stopped payments and negotiated a short sale below market value with the bank. The ex-husband, employed in insurance and education, remains in the home until it sells.

After two awkward cohabitation months for financial and childcare reasons, the ex-wife found an affordable rental on social media and moved out last month. Once sold, the ex-husband will temporarily live with friends until finding permanent housing.

The Struggle To Maintain Low Living Expenses

Divorcing couples today face tough decisions regarding jointly-owned homes with low mortgage rates. Some hesitate to officially file for divorce because of uncertainties around employment, establishing two households, and existing debt. Others proceed with filing but negotiate agreements to delay selling or refinancing their home to avoid today’s higher rates.

One woman agreed to buy out 40% of her ex-husband’s share of their home equity and pay him the remainder in 3 years. Though prolonging financial ties was not ideal, she felt it was the only viable option given current high rates. “If rates weren’t so high, I would have sold the house and moved or refinanced,” she explained.

With homes being a couple’s main asset, deciding how to handle the property remains a major divorce issue. Traditionally, couples sell and split profits or one spouse refinances and buys the other’s interest. However, selling or refinancing is more difficult now as rates hover at 20-year highs.

Cohabiting in a small home with an estranged spouse feels impossible for some divorced parents. “Co-parenting in our 1,200 square foot house is tough on some days,” one mother said about sharing a modest ranch-style home with her ex after separating.

Divorced parents who want to cohabitate amicably must maintain their composure and limits, particularly if there are kids involved. It is difficult to completely separate into separate households until there is the money to do so.

One divorced couple opted against buying or renting separate homes due to housing costs. Rather, they put the money they save toward their children’s sports fees.

Lacking transportation, a 47-year-old woman purchased a car in order to occasionally spend a few hours away from the home she now shares with her soon-to-be ex-husband and their two adult children.

Boundary Setting : A Necessity For Co-habitation

A Phoenix divorce mediator worked with a couple with five children who had to move 30 miles outside the city to afford two 4-bedroom homes after separating. The high cost of housing in Phoenix forced them to relocate to find affordable options large enough for each parent and the children.

According to one co-founder of divorce coaching, it’s becoming more typical for older divorced spouses to cohabitate. She emphasizes that setting limits—having separate grocery and laundry, for example—is essential when unable to move out, regardless of age. “If you can’t stay married and can’t leave, you can make new rules to show things are different now,” she states.

A recently divorced woman bought out her ex-husband’s share of their home by refinancing at a much higher 6.45% interest rate. Now that he has moved out, unaffordable mortgage payments prevent her from refinancing again until rates decrease.

“I’ll need to wait for interest rates to go down before I can refinance,” explains the retired microbiologist. The higher refinancing rate she accepted to purchase her ex-husband’s share of the home has made the monthly payments unaffordable. Though financially painful, refinancing was the only way to get him to move out after filing for divorce. She now hopes rates become more favorable soon so she can refinance and reduce her payments.

Skyrocketing housing costs have put many divorcing couples in a difficult situation where they cannot afford two homes. Consequently, some couples continue living together out of financial necessity after filing for divorce rather than by choice. This uncomfortable arrangement allows them to share expenses until finalizing the divorce.

Divorce Can Be Difficult, Goldman Law Can Help You Navigate The Difficulties

Goldman Law is aware of the emotional toll that family law and divorce can have. Our group of sympathetic lawyers seeks to lessen conflict by using strategies like mediation. The family legal services offered by Goldman law can help guide you in living together but separate while you prepare for divorce. Goldman Law puts in a lot of effort to obtain favorable results so that clients can proceed in a healthy way. Our legal knowledge gives clients the information and assistance they need to move on to the next phase of their lives. Give us a call and let us to assist you.