Houses that can accommodate more than one generation are in demand. A common definition of multigenerational living is having at least three generations living under one roof. Multigenerational living is on the rise, and the Pew Research Center reports that a record 64 million Americans live in multigenerational households. The National Association of Realtors 2017 Profile of Home Buyers & Sellers states that 13% of homebuyers purchased multigenerational homes. This is up from the 11% reported in their 2016 document. It would appear that younger Boomers are most likely to purchase a multigenerational home but it is not exclusively their market. Communal living households have a growing appeal with a shared belief that they encourage better health, prosperity, and support.
This type of living is by no means a new concept. By 1940, 1 out of 4 Americans were still living in multigenerational households. That rate declined through the 50s and 60s with the birth of the “nuclear family” concept and higher mobility rates. The 2007 recession saw a large spike in combined living and now, nearly 1 in 5 Americans is living in a multigenerational home, the highest level since 1950. There are a variety of reasons people choose multigenerational living.
Many state an economically related rationale such as increased home prices, childcare expenses, a challenging job market and college debt. Millennials choosing to stay at home and pay off loans make up a decent part of this population. There are also areas of the county with a lower home inventory and choices are broadened when other family members are added to the home purchase. A multigenerational living arrangement is helpful for single parents and delivers a peace of mind for everyone in regards to safety and companionship. People also reference health reasons to combine households. With extended life expectancies, aging parents prefer living with family to other choices, especially when it provides them bonding time with their grandchildren.
While families describe challenges within some of their living arrangements, they still tout the benefits of multigenerational living. They say it helps strengthen the family and eliminates travel costs since everyone is in the same place. There is a reduction not only in the initial housing cost, but also in regular home maintenance costs and utilities. Configuring a home for multigenerational living also has some resale appeal as the space could easily be used for a guest house, nanny space, rental unit, or home business.
When choosing or building a combined home, families are usually seeking privacy features such as separate living areas (TV), baths, kitchens (refrigerators), and laundry. They also consider having a separate entrance or door between spaces that can be locked if desired. Families with the ability to look at higher end properties search for options with a completely separate guest house or apartment. Other amenities people seek are multiple thermostats, multiple first floor master suites and ample garage/parking space.
A multigenerational home choice is a family decision and it is important to have open communications throughout the process. It is recommended to start with a neutral discussion where everyone can express their needs and wants without limitations. From there, the family can separate must haves from preferences and prioritize until a single list is compiled. The list would include everything from general configurations to details about the number of bedrooms, bathrooms, kitchens, living spaces, and laundry areas required for a copacetic living arrangement to happen.
Beyond the physical home, it is also important to set ground rules for living together. The family should discuss everything from parenting decisions to furniture choices to food. Assumptions should not be made about household chores or childcare so include those topics in the conversation as well. Monetary expectations should also be discussed - who is paying for what and when. Understand which expenses are split and which are separate, and then have monthly family meetings to discuss budgets and any other concerns that need to be addressed. It is suggested that the conversations include siblings who will not be living in the home so there is absolute transparency regarding assets.
A multigenerational living arrangement is not a multi-mortgage situation - everyone is factored together in one mortgage. While VA does not allow for multigenerational mortgages, Fannie Mae’s Home Ready program has a product that can benefit people looking to purchase a multigenerational home. The program allows for non-borrower incomes to be used for qualifying and requires a lower down payment than traditional mortgages. Non-traditional/flexible credit guidelines are used and for those without a bulk of credit history, cellphone bills, utilities, and rent may be considered. The program does require mortgage recipients to take an online homeownership education course and also has available post-purchase counseling. Insurance considerations for this type of living arrangement should be discussed with your insurance provider.
The demand for multigenerational homes is not slowing; creativity and flexibility are key. Know that finding a home and living together as a family is a process of negotiation and compromise but can be done successfully and for the benefit of all.
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