Increased Popularity in Multigenerational Housing is Changing How We Live
As housing prices continue to climb and space becomes limited, more and more people are opting for multigenerational living arrangements. A recent study of census data found that a whopping 64 million people in the U.S.—20 percent of the population—lived in multigenerational homes in 2016.
Defined as a household that includes two or more adult generations, multigenerational living has become increasingly more popular due to four key areas, including lack of affordable housing and availability, the state of the U.S. economy, culturally diverse population growth, and shifting lifestyles and attitudes surrounding this type of housing.
Rising housing prices and low housing supply is probably the most significant factor when it comes to multigenerational living. In March 2018, home prices rose 8.9 percent year-over-year, while housing inventory dropped by 13.6 percent. Though the past few months have given way to inventory increases in the Puget Sound region, there still isn’t enough supply to meet demand and home values continue to appreciate.
The U.S. economy has played a major role in the multigenerational housing trend. Due to the recession, young Americans had low employment opportunities, high unemployment rates, and huge student loan debt, contributing to many living with their parents. Aging family members also tend to require more care, which means higher out-of-pocket expenses, and expensive nursing home options. In 2017, the median cost of a nursing home room in the U.S. was $97,455 a year, a 5.5-percent increase from 2016. Because of this, people are buying homes with multiple living areas or remodeling their current home to make space for parents.
Population growth among cultural and racial groups in the U.S. has also contributed to the drive towards multigenerational living. Asian and Hispanic populations are growing rapidly and are more likely to live in multigenerational households. In 2016, 29 percent of the Asian population and 27 percent of the Hispanic population in the U.S. lived in multigenerational homes.
Shifting attitudes and lifestyles are yet another contributing factor in the trend towards multigenerational living. In the past, the main demographic in multigenerational households were ages 85 and older but as of 2016, 15 percent of 25- to 35-year-olds were living in their parents’ home. One theory behind this shift is that many young people are not settling down romantically before the age of 35. This, combined with the factors mentioned above, have created a new need for multigenerational housing.
In response, building has changed to accommodate these trends. Basement apartments, first-floor masters, and mother-in-law units are all being incorporated into new construction and renovations. These extra spaces are also a popular option for a second source of income. Additionally, with the lack of space in big cities and urban areas, more and more builders are maximizing lots to incorporate more units and create more versatility within a space, making it an ideal real estate market for the multigenerational family.