It's Valentine's Day. Picture a romantic restaurant. Main course is finished. Lights are low. Your sweetheart leans over the table, and with a quiet voice, starts to speak. You prepare yourself for any possible conversation, playing each one out in your head. And then the question comes: "How much do you think we'll save if we move in together?"
That might not be the romantic discussion you expected. But it's an important one. Housing costs and economics affect whether people get roommates, live with their parents, or - yes - move in with their sweetheart. In general, living together saves money - but that depends on how many bedrooms you upgrade to and where you live.
Love Can Save You 35% on Rent
Nationally, a 2-bedroom apartment rents for 30% more, on average, than a 1-bedroom in the same building. A bit of math reveals that trading in two 1-bedroom apartments for a 2-bedroom would save you 35% on rent. That makes sense: Renting a 2-bedroom should be less than renting two 1-bedrooms since the total number of bedrooms stays the same but you merge into one kitchen and maybe even one bathroom.
Where Shacking Up Saves You the Least: New York and Dallas
These shacking-up savings are national averages. Local markets differ, especially if you're looking to upgrade to that 3-bedroom together. The biggest discount for living together is in Sacramento, where a 2-bedroom costs, on average, 40% less than two 1-bedroom units in the same building. And the savings would be 50% if you traded two 1-bedrooms in for one 1-bedroom, but what you save in dollars you might end up paying for in stress. By comparison, a 2-bedroom looks like a pretty good deal. The discount is smallest in New York, at 28%, but even that will more than cover many years of overpriced Valentine's Day restaurant dinners.
The Shacking-Up Discount in Large Rental Markets
2-bedroom discount (vs two 1-bedrooms)
3-bedroom discount (vs two 1-bedrooms)
Median rent, $ (2-bedroom)
|2||Riverside-San Bernardino, CA|
|3||Las Vegas, NV|
|5||San Diego, CA|
|8||Orange County, CA|
|9||St. Louis, MO-IL|
|14||Tampa-St. Petersburg, FL|
|15||Minneapolis-St. Paul, MN-WI|
|20||Los Angeles, CA|
|22||San Francisco, CA|
|25||New York, NY-NJ|
|Note: Among 25 largest rental markets.|
But if you each really need your own spare bedroom to use for your home office, meditation practice, drum set, or whatever, the decision gets harder in some metros. In 23 of the 25 largest rental markets, a 3-bedroom is cheaper, on average, than two 1-bedrooms. The discount is largest in Las Vegas, Miami, and Baltimore. However, there's no discount in New York or Dallas: in those markets, a 3-bedroom is slightly more expensive than two 1-bedrooms - which is the same as saying a 3-bedroom is a little more than twice the rent of a 1-bedroom. And in Chicago, it's a wash. In general, the shacking-up discount is slimmer in metros where overall rents are higher.
After crunching the numbers, we're not so cold-hearted as to suggest that you should make your relationship fit your rental budget. It's just that we're in the business of giving advice on housing, not love, so we're sticking to what we know. But if you're the one leaning across the table on Valentine's Day, planning to make the case for why you and your sweetheart should move in together, you can thank us for making the proposal a little more compelling.
Note: this analysis is based on an apartment-unit-level regression of log-rents on dummy variables for 1, 2, and 3 bedrooms, with building-level fixed effects. This is based on units listed for rent on Trulia on January 9, 2014.