If you’re asked to picture a typical American home, you’ll probably imagine a single-family dwelling holding a mom, dad, kids and maybe a family pet. That picture isn’t as typical as it once was. Today’s family home may also house grandparents or a young adult or two. Multi-generational housing is a growing trend that makes sense to many. It’s one way of reducing expenses — but those who have experience say it has multiple advantages, as well as some challenges.
When it comes to two-generation households, low starting salaries and big student debt have fed the growth. Often young adults can’t afford to live on their own, and when they can afford it, they may want to save on housing in order to pay off debt more quickly.
Two types of multi-generational households are on the rise: two-generation and three-generation. The first is created when adult children continue to live with their parents or return to live with their parents at an age when they would typically be on their own. The three-generation type consists of grandparents, parents, and kids living together.
1 in 6 Gen X’ers purchased a Multi-Generational home, overtaking younger boomers as the generation most likely to do so; with 52% of those Gen X buyers indicating that they did so because their adult children have either moved back or never left home. This is according to the NAR 2019 Home Buyer & Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers. The report also found that older millennials who bought a multi-generational home, at 9%, were most likely to do so in order to take care of aging parents (33%), or to spend more time with those parents (30%). “The high cost of rent and lack of affordable housing inventory is sending adult children back to their parents’ homes either out of necessity or an attempt to save money,” said Lawrence Yun, NAR Chief Economists. “While these multi-generational homes may not be what a majority of Americans expect out of homeownership this method allows younger potential buyers the opportunity to gain their financial footing and transition into homeownership. In fact, younger millennials are the most likely to move directly out of their parents’ homes into homeownership, circumventing renting altogether.”