Happy Fourth of July weekend, friends and family! From Goldfinch Headquarters I want to wish everyone a happy and safe holiday. I imagine many of you are spending some time with family over the next few days, and keeping with that for a theme I thought this month I’d talk about multi-generational Home Buyers.
Recently in real estate we’ve been seeing an increase in multi-generational living, or homes with adult siblings, adult children over the age of 18, parents and/or grandparents residing with the primary home buyer.
Multi-generational living is not new, of course, and has been a viable or cultural living option for centuries. Still, it’s interesting to track such trends and look into reasons for recent upswings and downswings and reflect on what these changes mean for the housing market and the economy in general.
The National Association of Realtors started tracking data for multi-generational Home Buyers back in 2013 and have collected a wide range of information on multi-generational living through surveys and homeowner feedback.
According to the National Association of Realtors, between 2013 and 2023, the percentage of homes purchased that were multi-generational fluctuated around 12-14% every year with the lowest going down to 11% in 2016 and 2021.
However, in 2024 the percentage spiked up to 17%, the highest percentage in the last ten years and well above the average over that time period.
According to the NAR, the biggest reason among the respondents as to why they are living with family from multiple generations was due to cost savings. 36% cited cost as the most important factor.
Other leading factors included taking care of aging or sick family members, children moving back home and children who never moved away from home
Time will show whether the recent spike in multi-generational living is an outlier or the start of a new normal.
With increased demand in the market driving up home prices, and with interest rates remaining on average above 6% it’s hard to imagine those numbers slowing, though.
Living with their parents can be a financially savvy move for prospective home buyers needing to save money for a mortgage down payment. Nearly 70% of first-time buyers who responded to the NAR’s survey said their down payment came from savings.
Not having the equity from owning real estate, putting aside money is often the only feasible way for buyers to afford their first home, and with exploding rent prices, moving back with a parent or parents could be an important first step in starting to save for a dream home.
Of course, the data could be a reflection of the overall economy, and younger generations might be living at home simply because they can’t afford to live anywhere else regardless of any aspirations of owning a home.
Combating student loan debt, inflation, an inconsistent job market and growing living costs can present a lot of challenges to young adults. Similarly, retirees also have to navigate their retirement plan, savings and pensions with increased costs of living and healthcare costs.
All these factors help contribute to the recent spike in multi-generational homes, for sure. And it’s important to add that multi-generational living isn’t just a financial or economic decision, and the benefits and difficulties aren’t strictly economical.
Living among multiple generations can also offer emotional support and shared caregiving responsibilities. Living with family members spanning multiple generations can also come with problems of privacy, limited space and other understandable frustrations.
I’m curious to see how these numbers change in the coming years, though I suspect they’ll remain consistent for now, as we navigate a strong seller’s market and an economy battling inflation and spending concerns.
If you have any questions or would like to talk more about real estate, including current trends and outlooks, feel free to shoot me a message anytime!
In the meantime, have a Happy Fourth of July weekend everyone!
