In each episode of Netflix’s “Marriage or Mortgage,” a different couple from Nashville meets with a real estate agent, Nichole Holmes, and a wedding planner, Sarah Miller, who convince them to blow their nest egg on one of the show’s eponymous options. The show is in turn mind-numbing, heart-wrenching, and infuriating. (Also addictive.)
Filmed before the pandemic, the couples on the show are operating in a lukewarm housing market, and without the hindsight that would tell them not to risk it all on a big spring 2020 wedding. Their dilemmas are complex nonetheless: A couple is still living in the house one of the women once shared with her ex; another pair is abstaining from sex until marriage, but they’re also over living with roommates. Lost fathers, fertility challenges, heirloom-destroying fires — whatever the trauma, there is only one way to move forward. But which is it? A marriage or a mortgage?!
One common reaction to the series has been increasingly loud shouts of “NOOO!” as people choose marriage only to postpone or downsize. (Or gleefully roll out a ranch dressing fountain at their pared-down wedding, Covid be damned.) It also reveals how (or how not to) think about the costs involved with two persistent tropes of American adulthood.
But how close is this to real life? We asked personal finance advisers to weigh in, and what advice they had for those lucky enough to be stuck in a similar stalemate.
“The concept’s a little interesting,” Justin Green says diplomatically. He’s a financial planner and the founder of Assist FP who watched a couple of episodes with his soon-to-be mother-in-law while deep in the throes of planning for his own forthcoming wedding. “The one part they nailed is that young couples kind of do have to focus on one or the other first.”
The typical pair on the show has a budget between $25,000 and $30,000; they’re planning to put all of it toward the wedding or a down payment on a home that generally costs between $300,000 and $400,000. The current home value for a house in Nashville, according to Zillow, is $323,075, up from just under $300,000 in January 2020 and $280,000 in January 2019.
As housing prices in mid-size cities like Nashville rise, the stakes of choosing a wedding first are getting higher, said Shaun Melby, the Nashville-based founder of Melby Wealth Management. If they’re looking at a $300,000 home that’s going to cost $380,000 in a couple of years, “that $30,000 wedding may have actually cost them $80,000,” he said. “Not only that, they will now need to come up with even more of a down payment than before just to afford the same homes they were looking at and they’ll pay a bigger mortgage payment.”
While it’s obvious that the more practical move would be to buy a wealth-building home instead of throwing a party, the sensible choice doesn’t always make for great TV — or even real life. Over the course of 10 episodes, four couples chose house, and six chose wedding.
“A financial plan can easily show that $25k-$30k spent on a memory instead of investing, whether through a home down payment or in the stock market, is not a good idea,” added Eric Powell, the founder of the virtual financial firm The Future Mill. But “the reality is humans, not just Millennials, want to have great memories.”
Powell himself is a human Millennial who chose to compromise: He and his wife decided on a destination wedding that cost them $5,000. They saved the rest and eventually put it toward a house.
Still, that’s not a calculation most younger Americans can afford to make, according to Census Bureau data and research. In 2018, 9% of young adults between 18 and 25, and 15% of young adults ages 25-34, lived with a partner they weren’t married to, a cohabitation trend that coalesces with lower marriage rates. Since the ‘60s, the proportion of married young people has flipped: In 1968, around 60% of 18-34 year olds were married. By 2020, according to Census figures, 69% of 18-34 year olds had never been married. But that’s not to say they’re forgoing marriage to live together in homes they own.
“If economic resources appear to be important for entry into marriage, then it is understandable why many young adults today choose not to marry; they are facing unprecedented economic burdens despite being on average more educated than previous generations,” wrote Benjamin Gurrentz, then a survey statistician in the Census Bureau’s Fertility and Family Branch, in a 2018 working paper. It’s not shocking that crippling student loan debt and recession-sunk job markets lay a less stable foundation upon which to hold barnyard nuptials and/or afford a garage with 10 foot ceilings.
For Green, the financial adviser at Assist FP, the “emotional power” of a wedding won out over buying a house. (He lives in a rental apartment in Boston with his fiancée.) But he advises keeping something in the bank for unexpected emergencies, or practical matters like buying a bed. It’s unclear if the couples in “Marriage or Mortgage” are blowing their entire savings or leaving some cushion leftover.
“You really want to make sure you don’t sacrifice your emergency fund,” says Green.
Though spending on a house has been framed as a sounder investment, it’s also a longer-term financial commitment. Closing costs alone can add thousands to the bill, along with furniture and maintenance and property taxes.
Based on the cost of the home, most couples on the show have budgeted to pay around 6% to 10% for their down payment, an amount that reflects what the average American pays, too. While the median percentage has risen since the financial crisis, it has never reached even 10%, based on an analysis of 20 years of down payments by ATTOM Data Solutions, a real estate and property data company. In the fourth quarter of 2020, the median down payment was 7.7% of the median sales price.
Colin Moynahan, a financial adviser for Twenty Fifty Capital in Charleston, South Carolina, says it’s better to put down a bigger down payment if possible. A good rule of thumb is looking at how long you’re going to stay in the property, Moynahan says: If the buyers anticipate living there for 15 to 20 years, “where they have time to ride out the ups and downs of the real estate market, that’s where they can get away with putting down 10%,” he said. “Anything less than 10% is foolish. It’s going to cost you at least 5% to sell the property.”
“For the down payment, they really, really want to be as close to the 20% mark as possible,” Moynahan says. Especially, in a housing market where almost half of U.S. homes are selling within a week of listing, larger cash offers are winning out.