According to a report from the Pew Research Center, a record 57 million, or 18.1% of Americans were living in multi-generational homes in 2012--double the number in 1980--and the trend doesn't look like it's slowing down anytime soon.
About 13% of home buyers are in the market for a multi-generational home, according to the Home Buyer and Seller Generational Trends report released by the National Association of Realtors earlier this year. A multi-generational household consists of three or more generations, including adult children over the age 18, and/or aging grandparents living together with mid-aged children.
Younger boomers (aged 50 to 59) are the largest consumer of multi-generational homes, accounting for 21% of total buyers. The Silent Generation (aged 69 to 89), followed by older boomers (aged 60 to 68), make up 19% and 15% of multi-generational homebuyers, respectively. In general, people over 50 have been a major target in the multi-gen home market.
Several factors drive this trend. High housing costs force people to live with relatives to save money. Many young adults paying off student loans, struggling to find a job, or living on a smaller salary move back with their parents while trying to save money. Additionally, a “Downsize Surprise” shows retirees are less apt to move to a smaller home, either staying put to house returning college grads, or to relocate and live with adult children for care or to help look after grandchildren.
Multi-generational homes also meet the need of an increasing number of immigrants who culturally value living with extended family.
The chart below offers a glimpse into multi-generational household changes in the nation's top five multi-gen states over the past five years (2008-2014). Outside of Hawaii, all other states saw big jumps in their multi-generational household rates in 2010, two years after the financial crisis that left many residents no choice but to slash housing costs.
Three out of five states in our chart
above have a median new home price above $400,000, way higher than the
national median of $295,200, which explains why people in Hawaii, California,
and Maryland are more inclined to live with multiple generations. In Mississippi,
where the median household income falls slightly shy of $40,000, residents may be priced out of the entry-level home market, and decide to move-in with family. In addition, the higher rate of multi-generational households
in California and Texas in part reflects the large number of Latino and Asian-American
residents in these states.
Based off data from the American Community Survey, multi-generational homes are gaining traction in certain states, and builders in those states should research which markets they should target in those states for multi-gen home product. Using data from this year’s Metrostudy reports, and the one-year estimates from the American Community Survey 2008-2014, we've created an interactive map to showcase the geographic presence of multi-generational households in America.
