All in the Family: Multi-Generational Home Buying
Thursday Feb 09th, 2023
By: Jessica Lautz
Multi-generational home buying is a way for families to care for one another, support one another, and often buy a home that may have been previously out of reach. Multi-generational buying may be a home where families live in the same home with elderly parents, children who have boomeranged back home, or other extended family members. While this is not a new concept of living, it is one which has gained recent popularity.
This past year, NAR collected data in the Profile of Home Buyers and Sellers, which shows that multi-generational buying is back near an all-time high at 14%. This is up from 11% in the 2021 report. In 2020, the report found a low before the COVID-19 pandemic of 11%, followed by an immediate gain to 15% of all buyers.
Reasons to purchase a multi-generational home vary among first-time and repeat buyers. However, the shares purchasing a multi-generational home are nearly identical: fifteen percent of first-time buyers purchase a multi-generational home, as did 14% of repeat buyers.
For first-time buyers, who struggled to enter last year’s housing market, perhaps it is unsurprising that they are more likely to purchase a multi-generational home due to cost savings and for a larger home that multiple incomes could buy together. First-time buyers, who have a median age of 36, also are more likely to say their adult children have not yet left the nest. On the other hand, repeat buyers, who have a median age of 59, are more likely to say their adult children are now boomeranging back.
For both first-time and repeat buyers, about 30% report that caretaking or spending time with aging relatives is important. First-time buyers are more likely to state that spending time with aging relatives is important versus caregiving. While the data is not collected, it is possible this could mean assistance with childcare for parents, as well.
Among generations, it is most common for Gen Xers (born between 1965-1979) to purchase a multi-generational home. This may not be surprising as they may both be caring for aging parents and experiencing young adults boomeranging back at the same time. In the midst of this, it is not hard to imagine a Gen Xer needing to buy a larger home for all generations of the family to happily cohabit in one home.
It is also more common for minority home buyers to purchase a multi-generational home in comparison to White/Caucasian home buyers. Thus 18-19% of Black/African-American, Asian/Pacific Islander, and Hispanic/Latino buyers purchased a multi-generational home in comparison to 10% of White/Caucasian buyers. The most common reason for all buyers, regardless of race, was for caretaking and spending more time with aging relatives.
As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millennial and Gen Z children or if they stay put in their own homes. The trend of multi-generational buying appears to be firmly established and one that could expand in the future.
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