Often people don’t plan to live with their parents, or an uncle or aunt — it just happens. But some people do it on purpose; they purchase a multigenerational home, which is usually defined as two or more adult generations under one roof, with the idea of having the kids, parents and grandparents or other relatives all in one place.
According to the U.S. Census, which classifies multigenerational households as three or more generations under one roof, there were 6 million of these households in 2020, up from 5.1 million in 2010. And Pew Research estimates the number of homes with two generations of adults 24 and over, or grandparents with younger grandchildren, quadrupled between 1971 to 2021, with 59.7 million multigenerational homes.
Some real estate agents also report seeing more people than usual interested in multigenerational homes.
“Since home prices have skyrocketed after Covid, I have had more requests for multigenerational housing than in the previous 10 years combined. It’s definitely a common scenario now,” says Andrew Fortune, a real estate agent and owner of Great Colorado Homes, a real estate brokerage in Colorado Springs, Colorado.
If you’re thinking about buying a multigenerational home, there are some specific things to consider.
[Read: What Are Granny Pods?]
Why People Buy or Form Multigenerational Households
There are a lot of reasons some families are gravitating to multigenerational houses, says Sherry Lynn Westhues, a real estate agent with ReeceNichols Real Estate, located in Blue Springs, Missouri. She cites three main reasons.
— Culture. “A lot of the demand is cultural,” Westhues says. “We see a lot of our Indian community and Bosnian community living multigenerational, so that’s cultural. They’re always going to do this. It’s not a financial decision.”
— Money. “Somebody’s lost a job, the pandemic, whatever it is. A kid comes home from college and they can’t really afford to go back out on their own for a while,” Westhues says.
— Health. “Then we have the caregiver who doesn’t want to send their parent to a nursing home. We are seeing a lot of that now because of the issues we see in nursing homes,” she says.
Westhues also thinks there are other factors, harder to classify, at play, where “families are changing their dynamic.” Some of them simply want to live at home longer, so families are adding onto their homes for their adult kids or other relatives — or buying more acres and building more homes on it to keep family members close.
People are living longer, too. The average life expectancy for an American adult is currently 78.4 years. In 1960, the average life expectancy was 69.7 years, and when we get to 2060, the expected average life expectancy will be 85.6 years, the Census projects.
Thin Market for Multigenerational Households
From her real estate perch, Westhues feels there is a huge need for more multigenerational housing, but it’s going unfilled by builders.
“We have a complete lack of inventory. It’s almost like we’ve missed an entire buyer pool,” she says. “Builders are not thinking of this and our community doesn’t support the inventory for it,” she says.
If you really want a multigenerational home, Westhues says, you may need to hire a builder to create one that meets your specifications for size, number of rooms and other considerations. There aren’t many multigenerational homes on the market.
You can also buy an existing home that isn’t meant for multiple generations and try to make it work, or you can add on to a home.
[Read: Remodeling Projects to Make Aging in Place Easier]
What People Want in a Multigenerational Home
Westhues says people generally want two primary suites on the main level or, better yet, a ranch-style home with no upper level. If the choice is a home with three levels including a basement, it’s usually the younger generation who gets to hoof it up and down the steps.
“That’s by far our biggest need. The whole point is they don’t want stairs,” Westhues says.
Fortune sees the same wants and needs. He says a master bedroom on the main level can “keep the older folks off the stairs.” He also says that families in mixed-generation living situations tend to like homes with some acreage, plenty of parking and split-level living with a kitchen or wet bar on each level.
Beyond larger homes that can accommodate multiple families, there is a trend of homes with mother-in-law suites, converted basements and “frogs,” explains Phil Crescenzo Jr., in Mount Pleasant, South Carolina, vice president of the Southeast division at Nation One Mortgage Corp.
A frog, Crescenzo says, is an acronym for “finished room over garage.” The frog option, he says, also allows separate access and separate living quarters.
It’s not a new idea. Some older readers may remember Fonzie on “Happy Days” living in a frog, over the Cunninghams’ garage, though they never called it that on the show.
Multigenerational Homes Are Pricey
Multigenerational homes are typically more expensive than traditional single-family dwellings. How much more expensive is hard to say. According to Rocket Mortgage, the typical cost of building a new home is between $138,523 and $525,406. If you’re building a new home with more amenities, such as that wet bar and two primary suites on the main level, and a lot of parking, you can expect to pay closer to the high end of that range — and maybe more than that.
But prices can vary so much, depending on what you’re looking for. Adding a mother-in-law suite can range from a bargain basement $25,000 to a jaw dropping $265,000, according to the home improvement website Angi. Westhues also says families increasingly want to buy acreage so they can build two or three homes on a property and be in close proximity. That, of course, will greatly increase your real estate purchase.
If you plan to retrofit a large home that can accommodate a few generations in order to split the mortgage and home maintenance costs, you could find it’s less expensive than living on your own.
If you have multiple people on the mortgage, think about credit scores, cautions Crescenzo. Gathering paperwork together and credit evaluations for one or two people with their names on a mortgage is hard enough; if you have three or more adults, it’s even more of a challenge.
“Have a good idea of each other’s finances, and credit scores,” Crescenzo advises. “Qualifying is always based on the lowest of the scores, so in a multigenerational scenario, it may be best to utilize the buyers with the best profiles versus adding one additional that could hurt the application. This is often overlooked and is easily preventable.”
More from U.S. News
Your Home, Year 1: What You Need to Know
Want to Buy a House in 2025? Follow these 14 Steps
Final Walk-Through Red Flags: What to Look For Before Closing
What to Know About Buying a Multigenerational Home originally appeared on usnews.com
