Housing affordability is so strained that 1 in 5 couples ask for down payment cash on their wedding registry. Your friends and family would rather give you cash to go to Mexico

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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 Ph.D. in marketing from the University of Texas at Austin’s McCombs School of Business and her primary research focus is consumer behavior. A gift-giver knows that whether or not they give to a first-home fund, the recipient will purchase it themselves, she says.

“A honeymoon fund is probably something that’s perceived by givers as elective—and certainly hedonic—and thus by giving a higher dollar gift, the giver can offer something the recipient wouldn’t otherwise have access to,” she tells Fortune. “On the other hand, I would guess that givers think of a new home as more utilitarian and thus, less fun to give and probably something that the recipients will purchase themselves irrespective of whether they receive money for it as a gift.”

Ward also conducted research in 2016 that shows how wedding gift-giving differs from other types of gift-giving. For one, she found that when givers were faced with purchasing from a gift registry versus making their own choices of a gift, they often rejected the gift registry.

“It turns out that givers say they want to please the recipient as their highest priority, but often they’re using gift-giving opportunities as a way to signal their sentiments or the meaning of the relationship,” Ward adds.

Guests may also be more generous toward a honeymoon fund because they can give to specific experiences—whether it’s sunset cocktails, a tasting menu at dinner, a glass-bottomed kayak, snorkeling, or a ski lift pass in the Alps, Lee says—instead of donating to one giant fund where they may not understand the impact of their gift. 

“This allows couples to piecemeal their honeymoon fund even further, thus helping guests participate in each chosen experience,” Lee says. “The overall home fund is seemingly a more sizable amount that may seem daunting up front to guests. But with each contribution, a new home fund can become more approachable, with more guests potentially feeling more open to contributing.”

Soaring home prices fuel trend

While the trend of adding first-home funds to wedding registries isn’t completely new, “they’ve really picked up steam” in the past few years, Cathryn Haight, editor of gifting and stationery at The Knot, previously told Fortune. Since 2018, the share of couples including “home funds” as part of their wedding registry has increased 55%, according to Zillow and The Knot.

While any money is helpful when it comes to purchasing a home, hundreds of dollars could really just be a drop in the bucket for newlywed couples. 

The value of the typical home in the U.S. right now is about $350,000, Pendleton says, which means a couple would need to come up with $70,000 if they plan on putting down 20% on the home purchase. By comparison, the average cost of a wedding in the U.S. is $30,000 which includes the ceremony and reception, according to The Knot 2022 Real Weddings Study.

“This is a lot of cash and can be very intimidating for young couples looking to buy their first home,” Pendleton says. “Oftentimes, putting less than 20% down is totally doable, and your loan officer can talk you through your options. Keep in mind though, that the less money you put down, the higher your monthly mortgage payment will be.” 

Fortune was early to report on this trend earlier this summer, sharing the love story of Oliver and Cassie Nilsson who first met in 2012 at an Outback Steakhouse. When it came time for them to wed and buy a house, they hadn’t realized exactly how bad the market had gotten and how much cash they’d need. 

“Our expectation was as soon as I graduated college we would buy a house,” Oliver told Fortune. “We wanted to get a townhouse because we want a little yard for dogs. But we quickly realized that was not on the table for us, especially with the interest rate being so high.”

The couple ended up living with Oliver’s parents for eight months to save up enough money to afford to buy a condo. To help with the down payment on their home, the couple added a “first-home fund”—their one and only request on their wedding registry. 

“Honest to God, it was this [the first-home fund] and his parents letting us stay there,” Cassie told Fortune. “We would have never been able [to buy]. We would have rented our whole life.”

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