Between varying down payment amounts, loan types, neighborhoods and more, the path to homeownership looks a little different for everyone. In fact, now more than ever, potential owners are using out-of-the-box techniques to approach the homebuying process. A prime example of this shift in norms is the rise of multigenerational housing.
What is multigenerational housing?
Multigenerational households are those that consist of “two or more adult generations, such as a parent and child, or a grandparent, parent and grown child, as well as a skipped-generation home with a grandparent and grandchild” (Pew Research Center, 2011).
Benefits of multigenerational housing include:
● Improved financial resources
● Reduced stress
● Reduced loneliness
● Increased intellectual sharing
● Increased health (Washington Post, 2018)
Multigenerational housing trends
The National Association of REALTORSⓇ (NAR) began tracking multigenerational housing trends in 2012 (NAR, 2021). After the 2008 recession, struggling families were sharing spaces more than ever. Numbers have continued to climb in the years since.
In 2020, a record number of buyers purchased multigenerational homes (National Association of REALTORSⓇ, 2021). These buyers made up a significant 15% of overall homeseekers. The COVID-19 pandemic and associated financial struggles may have influenced a similar jump in numbers.
In March 2020, before nationwide lockdowns, layoffs, and social distancing measures, 25% of multigenerational buyers were motivated to care for an aging parent. After April 2020, this figure jumped to 28%. This portion of buyers was the largest both before and during the pandemic, and the momentum may not slow. More than half of American nursing homes report losing money, and a staggering 72% are at risk of closing within the next year. The change is likely due to safety concerns amid the pandemic as well as increased childcare needs as schools experienced sporadic closures.
Another 20% of multigenerational buyers were making room for adult children or relatives moving back home. In the midst of the pandemic, that figure decreased to 13%. While this portion of homebuyers did drop, it’s important to note that more young adults are now living at home than at any other time since the Great Depression. Approximately 52% of 18-29-year-olds have moved back in with their parents, likely due to changing higher education plans or post-pandemic job losses.
Approximately 17-21% of multigenerational buyers have recently sought to spend more time with aging parents or relatives. This portion of buyers experienced the most significant growth of all, likely due to health and safety concerns in the era of COVID.
What multigenerational housing means for buyers
Needless to say, multigenerational housing trends illustrate that the traditional route to homeownership isn’t the only way. Whether you’re planning to care for aging parents or pooling down payment funds with adult children, sharing a home can be mutually beneficial. After all, the more, the merrier!
Published on August 30, 2021
