Almost 30 years ago, in the days of chintz drapes and coral-colored couches, only 12 percent of Americans were living in multigenerational homes. This was down from the height of pre-WWII when almost 25 percent of homes included up to three or more generations.
According to a recent study by Pew Research, the multigenerational housing trend is on the rise. In the past four years, over 60 million Americans were living with multiple generations under the same roof. That’s just shy of 20 percent of the population.
So what’s driving that trend? It’s likely a variety of things, but the cost of housing far out-stripping incomes in many markets is at the root of it. The enormous influx of Baby Boomers reaching retirement age while Millennials struggle to enter the housing market contributes as well. As does the influx of cultures accustomed to this living dynamic.
According to Donna Butts, executive director of Generations United which is a nonprofit that promotes multigenerational living, it’s a mix of factors. As Baby Boomers continue to age, they’re moving in with their kids, which can provide peace of mind – in case of gradually developing health or mobility issues – and save money.
If you’re looking to complete a remodel to accommodate another generation under the same roof, contact one of our Licensed Lending Officers to get more information on a home equity loan.
So how does this shift in living arrangements impact the housing market?
Multigenerational homes see increasing demand
Regardless of the reason, the demand for multigenerational homes is increasing. A CNBC article revealed that over 40 percent of homebuyers were looking to accommodate either adult children or elderly parents (or both) in their next home purchase.
The trend is catching on in the homebuilding industry. Contractors are beginning to create floor plans to cater specifically to the multigenerational homebuyer, like Miami-based builder Lennar. Their “NextGen” model home is gaining traction in the marketplace as more buyers are looking to house more family members under one roof.
Demand will increase as Baby Boomers age
According to AARP, more than 10,000 Boomers reach the age of 65 every day and the number of Boomers currently living in the U.S. is about 77 million. The price of senior housing continues to grow, as does the price of childcare, so multigenerational options will continue to grow in demand.
How to maintain privacy?
While multiple generations are living under the same roof and sharing a communal space, they still want their privacy. Adult children moving back in are looking for a separate entrance to the home so that they can come and go as they please. Older generations are looking to have personal bathrooms, in addition to a small kitchenette.
Even with communal entertainment areas, like TV rooms and living rooms, there was also a request for a separate, private area to host guests and watch TV.
Higher resale potential
As these layouts and living arrangements become more prevalent in the market, expect them to come at a premium. Not only can these separate living spaces be used to accommodate family, but they can also potentially be used as a rental property or a home office.
If you’re looking to remodel or purchase a new home to accommodate multiple generations under one roof, our team can help. Speak to a loanDepot Licensed Lending Officer to find out more today. Call now to review the best options available for you.
Published April 6, 2018
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