Multi-generational Home Buyers
Multi-generational homes are back in a big way! In the 1950s, about 21%, or 32.2 million Americans shared a roof with their grown children or parents. According to a recent Pew Research Center report, the number of multi-generational homes dropped to as low as 12% in 1980 but has shot back up to 19%, roughly 60.6 million people, as recently as 2014.
Multi-generational households typically occur when adult children (over the age of 25) either choose to, or need to, remain living in their parent’s home, and then have children of their own. These households also occur when grandparents join their adult children and grandchildren in their home.
According to the National Association of Realtors’ (NAR) 2016 Profile of Home Buyers and Sellers, 11% of home buyers purchased multi-generational homes in 2015.
The top 3 reasons are:
- Take care of aging parents (19%)
- Cost savings (18%, up from 15% last year)
- Children over the age of 18 moving back home (14%, up from 11% last year)
This shift can be attributed to the following social changes:
- Growing racial and ethnic diversity in the U.S. population.
- The rapidly growing Asian and Hispanic populations are more likely to live in multi-generational family households.
- Women are slightly more likely to live in multi-generational homes than are their male counterparts (20% vs. 18%, respectively).
- Last but not least, basic economics.
Carmen Multhauf, co-author of the book “Generational Housing: Myth or Mastery for Real Estate,” addresses the fact that rents and home prices have been skyrocketing in recent years. She says, “The younger generations have not been able to save,” and often struggle to get good-paying jobs.
Real Estate Bottom Line
Multi-generational households are becoming more and more common. This type of household may be a good solution for those families looking to buy a home as prices continue to rise.