Multigenerational Housing Trends

Living in multi-generational households is common in many cultures. It has long been stigmatized in the United States. When the Great Recession led to significant unemployment numbers for young adults, many reluctantly moved back to their childhood home to live with their parents. Once there, many have warmed to the idea of keeping family under one roof to maintain more control over their finances.

Aging Americans

As the economy began to recover, the percentage of multi-generational households continued to increase. The rising cost of retirement home living and in-home health care providers has led many older Americans to move in with children or spend some portion of the year living with each offspring. With improvements in medical science and statistics showing increased life expectancy, one might think older Americans were the group driving multi-generational housing number. But, since 2012, young adults between 25 and 35 have been the group most likely to live in a multi-generational home.

Numbers increased in all age groups but one

Though the percentage of homes that have more than one generation residing there has increased at a slower rate post-recession, the increase continues across all ethnic, racial groups, and genders. For seniors, the women who outlived their husbands are most likely to be living in a multi-generational home. For young adults, men are way more likely than women to be living under the same roof with their parents. According to the Pew Research Center, the only age group that has had a decrease in the percentage of people living in multi-generational homes is people ages 65 to 84. They had a very small decrease between the years of 2010 and 2012.

Numbers have doubled since 1980

According to an analysis of data from the U.S. Census Bureau, Pew Research Center finds the number of individuals with a multi-generational home increased from 28 million in 1980 to 57 million in 2012. The numbers have increased steadily each decade, going from 35 million in 1990 to 42 million in 2000. For the first decade of the 21st century, the number of people residing in multi-generational houses increased from 42 million to 54 million. The upward trend has slowed, but numbers continue to increase.

Will continue being a significant portion of the housing market

The National Association of Realtors reports that 14 percent of homes purchased in 2014 were for the purpose of accommodating multiple generations of occupants under the same roof. Just under 25 percent of those buyers said it was due to boomerang kids. That is people over the age of 18 who once moved out and then moved back home to their parents. That number is 33 percent for buyers aged 59 to 67. Thirty-eight percent of those multi-generational home buyers between 49 and 58 bought to accommodate their boomerang kids.

What it means to the housing market

The traditional 3 bed, 2 bath house is less desirable to more buyers. More buyers want two master bedrooms on the main floor. The ideal design is a split floor plan with bedrooms on the main floor and added privacy for the living area of family members. More buyers seek large dining rooms than large kitchens. The dining room was almost considered obsolete a few years back. It now provides and additional room for the extra occupants to create their own little home within the home. It frequently serves as a second living room, where the family member(s) can have their own TV, computer, etc.
Regional and national builders are already mindful of the impact multi-generational home buyers will have on the real estate market. They change house designs to match the current economic conditions and trends. Home sellers and real estate agents should also consider how they can make room for this growing segment of home buyers.

The Importance of Home Inspections

People often have strong opinions about home inspections. There are some builders who hate home inspections and don't care much for the people who do them. Many sellers think it is just a ploy to further whittle away at their asking price. A comprehensive and thorough examination of the condition of a house by a professional inspector is sure to reveal some defects. It takes time and can be unsettling to both the buyer and seller. Both parties might be fearful that something uncovered will derail the transaction. Sellers do not respond well to the notion that they allowed some defect to remain untreated. Buyers, who have found their dream home, do not want to walk away from the purchase of a home that meets all of their criteria in ever other way. But home inspections are important and should not be skipped.

Why sellers should have home inspections

A pre-listing home inspection will establish a more stable negotiating platform for the seller as they consider and respond to all offers. Historically, home inspections take place after an agreement on price and terms has been reached. When issues are found, it results in re-negotiations and often repairs that are the seller's responsibility. Sometimes, when the seller is already at their lowest price, the transaction will fall apart if the repairs are needed for financing. The buyers may not be willing or able to cover the cost of repairs themselves. When the seller is planning their next home purchase based on the sale of their current home, unexpected defects that are only discovered after contracts are written can be disastrous.

When people live in a residence for a long time, they become accustomed to the property's condition and they do not always notice the minor issues that can add up and lower the overall value of the home. A defective light switch or faulty outlet that the family never used anyway will become an issue to potential buyers. The old HVAC system has probably been working just fine for the past 15 years. But it is really at the end of its useful life and will cost the next owner thousands of dollars to replace.

Having an objective evaluation of the house by a licensed professional before putting it on the market helps sellers know what issues will come up during negotiations. It will help them remain in control of the transaction and keep it moving in the direction suitable for the seller.

Why buyers should have home inspections

Sellers are legally bound to disclose any known defects with the home they are selling. New construction is covered by at least a one-year warranty. But sellers do not always know about damage caused by termites or carpenter ants. They may have a growing mold problem in the crawl space, a small leak that is damaging insulation and sheathing in the attic, or a minor problem with the HVAC system that will soon cost big bucks to repair. Many builders have numerous houses under construction at the same time. When they get one under contract, they will shift focus to other projects or rush the completion. This can result in shoddy workmanship and latent problems that will only become an issue years down the road.

It is better to uncover potential problems prior to closing the transaction. A builder is much easier to reach before you take ownership of a property than they are after you have moved in. Being legally entitled to getting something repaired does not eliminate all of the aggrevation and inconvenience involved in forcing a builder to make something right. Moisture problems and many other issues may not be noticed by homeowners until after the first year. This can further complicate matters.

A home inspection provides an added layer of security for all parties involved in the real estate contract. For buyers, it helps them have more confidence in the condition of the house, whether it be from a private seller, builder, or a bank foreclosure. For sellers, a home inspection empowers them with a full understanding of how their home measures up to the competition. It will help both buyers and sellers prepare for their future and feel good about the transaction for many years to come.