June 23, 2024

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House down payments on wedding registries: the average gift

2 min read

For millennials and Gen Z, the American Dream milestone of buying a home can feel hopelessly out of reach as mortgage rates hover around 8% and home prices continue to rise. 

As a result, one in 5 engaged couples are rejecting the linens and dishes of traditional wedding registries and asking friends and family for down payment cash instead, according to an October report by Zillow and The Knot, a wedding planning site. 

With an average of $70,000 needed for a 20% down payment on a starter home, it’s understandable that couples would search for creative ways to get cash. 

“I think we can be optimistic that instead of throwing in the towel, young couples are willing to give up tangible gifts or even honeymoon funds in order to get closer to achieving the American Dream of homeownership,”  Amanda Pendleton, a personal finance expert at Zillow Home Loans, tells Fortune. “They see the value of saving for an appreciating asset, as opposed to the immediate gratification of new bedding or silverware.”   

But there’s a slight problem: It seems wedding guests are put off by this request, as data shows friends and family are less enthusiastic about the new breed of  honeymoon registry. 

The typical couple receives 32% more for a honeymoon fund, with an average of $767, compared with a new home fund average of $556, Esther Lee, deputy editor of The Knot, tells Fortune

With mortgage rates hitting 23-year highs this fall and home prices on the rise, why would wedding guests be more willing to give to a honeymoon, than something more practical like a first-home fund? It’s time for a small lesson in what experts call behavioral economics.

The power of choice 

Morgan Ward, a marketing professor at top-ranked Emory University’s Goizueta Business School says it could be because people like to give more “hedonic” products as gifts—or things that the recipient wouldn’t otherwise purchase for themselves. Ward earned her…

Sydney Lake

2023-11-05 08:03:00

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