In today’s challenging real estate market, an increasing number of divorced couples are making the unconventional decision to continue living together on the same property despite having legally ended their marriage. This trend, driven primarily by financial considerations related to mortgage rates and housing affordability, represents a significant shift in how people approach both divorce and homeownership. With interest rates having risen dramatically from the historic lows of recent years, many individuals find themselves trapped between the desire to move on emotionally and the practical reality of their financial situation. The current economic landscape has created a perfect storm where selling a home and purchasing another at today’s rates could mean doubling or even tripling monthly housing costs, making separation financially prohibitive for many middle-class families.
The story of Ryan Hambry and Morgan Dickson from Cape Canaveral, Florida illustrates this phenomenon perfectly. Having refinanced their home at an incredibly favorable 2% interest rate before their divorce, neither was willing to sacrifice this financial advantage by selling and entering today’s market where rates hover around 7%. Their solution—living in separate structures on the same property—demonstrates the extreme measures people are taking to preserve their financial stability. This arrangement, while unconventional, allows them to maintain their low mortgage payment while navigating their new relationship dynamics. Their experience highlights how financial considerations can sometimes override emotional preferences in today’s challenging economic environment.
This trend isn’t isolated to Florida or to couples without children. Megan Meyer’s situation in South Carolina shows how complex these arrangements can become when new partners and multiple children are involved. Her household includes her current husband, her ex-husband, and their children all living under one roof—a arrangement they describe as platonic but practical. The financial benefits are substantial: shared housing costs, reduced childcare expenses, and maintained stability for the children. However, this requires exceptional emotional maturity and clear boundaries from all parties involved. The fact that families are considering and implementing such unconventional living situations speaks volumes about the financial pressure created by current real estate and mortgage market conditions.
The mortgage rate environment has created what economists call ‘golden handcuffs’ for homeowners who locked in low rates during the pandemic. With the Federal Reserve raising interest rates to combat inflation, mortgage rates have climbed to levels not seen in decades. Homeowners with rates between 2-4% face enormous financial disincentives to sell their properties, as purchasing a new home would mean accepting rates nearly double what they currently enjoy. This rate differential can translate to thousands of dollars in additional monthly payments for comparable properties, effectively trapping people in homes that may no longer suit their life circumstances, including marital status changes.
From a real estate finance perspective, this phenomenon has significant implications for housing market dynamics. The inventory of available homes remains constrained partly because potential sellers are choosing to stay put rather than give up their low-rate mortgages. This creates a feedback loop where limited supply supports higher home prices despite elevated interest rates, making affordability even more challenging for first-time buyers. The traditional housing cycle where people upgrade or downgrade as life circumstances change has been disrupted, with financial considerations overriding what would normally be emotional or practical decisions about housing transitions.
For divorced couples considering this arrangement, several financial factors must be carefully evaluated. The mortgage itself may need to be refinanced to remove one spouse from the obligation, which could trigger the loss of the low rate if the loan is assumable. Property taxes, insurance, and maintenance costs must be allocated fairly between parties. There may also be legal considerations regarding how long this arrangement can continue before it affects property division agreements or spousal support calculations. Consulting with both financial advisors and attorneys is essential to ensure that the short-term financial benefits don’t create long-term legal or financial complications.
The emotional and psychological aspects of these arrangements cannot be overstated. As relationship therapist Kerrie Mohr emphasizes, successful co-living after divorce requires significant emotional maturity from all parties involved. The wounds from the ended relationship must be sufficiently healed to allow for a new type of relationship dynamic focused on cooperation rather than conflict. This is particularly challenging when new partners enter the picture, as jealousy, resentment, and boundary issues can quickly undermine even the most practical financial arrangements. Regular communication and clearly defined living spaces and schedules become essential for making these situations work long-term.
From a market perspective, this trend reflects broader affordability challenges in the housing market. With home prices having increased dramatically in recent years and mortgage rates remaining elevated, many Americans simply cannot afford to maintain separate households after divorce. The financial math often shows that maintaining the marital home—even with an ex-spouse—is more economical than trying to establish two separate households. This is particularly true in high-cost areas where housing represents the largest portion of household expenses. The phenomenon represents a rational response to irrational market conditions that have made housing unaffordable for many.
Practical considerations for making these arrangements work include establishing clear written agreements covering all aspects of shared living. This should include division of expenses, scheduling of common areas, guidelines for guests and new partners, and protocols for resolving disputes. Many successful arrangements involve physical separation within the property, such as converting basements or garages into separate living units or adding accessory dwelling units. Technology can help with scheduling and communication through shared calendars and messaging apps. Regular check-ins to assess whether the arrangement continues to work for all parties are also essential, with exit strategies clearly defined from the outset.
The children’s perspective in these arrangements deserves special consideration. While children may benefit from having both parents physically present, the confusing dynamics of divorced parents living together can create emotional challenges. Experts suggest being age-appropriately honest with children about the living situation while maintaining clear boundaries about the nature of the parents’ relationship. Consistency in parenting approaches and routines becomes even more important in these unconventional setups. Parents should watch for signs of confusion or distress in children and be prepared to adjust the arrangement if it’s not serving the children’s best interests, even if it means financial sacrifice.
Looking forward, this trend may continue as long as mortgage rates remain elevated and housing affordability challenges persist. Some experts suggest that multi-generational and multi-family living arrangements of all types will become more common as financial pressures mount. Builders and developers may need to adapt by creating homes better suited to these non-traditional living situations, with separate entrances, kitchenettes, and soundproofing between units. Lenders may need to develop new products that accommodate these complex ownership and borrowing situations. The traditional nuclear family living in a single-family home may become less common as economic realities force innovation in how we think about housing and household composition.
For those considering this path, actionable advice includes first consulting with a financial advisor to fully understand the numbers—calculate exactly how much you’d save by maintaining the current mortgage versus establishing separate households. Next, work with a mediator to create a detailed co-living agreement covering all practical aspects of the arrangement. Consider the physical layout of your home and whether modifications could improve privacy and functionality. Most importantly, be honest with yourself about whether you and your ex-partner have the emotional capacity to make this work long-term. Have a clear exit strategy and timeline, and be willing to revisit the arrangement regularly to ensure it continues to meet everyone’s needs, both financial and emotional.
