More Families Are Choosing Multigenerational Homes for This Important Reason
Last month, Leticia and Bernardo Galvez bought a four-bedroom home in Escondido, California so they could accommodate multiple generations of their family under the same roof.
The couple now lives with their two children, ages 9 and 19, and Leticia Galvez’s 73-year-old father, Gabriel Guzman.
With housing costs climbing and economic pressures mounting, many families like the Guzmans are facing tough decisions about how to afford a place for everyone to live. One solution gaining popularity is multigenerational living. This is when two or more adult generations live together or in separate units on the same property.
About 14% of all homebuyers last year purchased a multigenerational home, according to a report from the National Association of Realtors. That was up from 11% in 2021.
Buying a multigenerational home may make financial sense for some families. Sometimes older generations can provide childcare for working parents. Meanwhile, adult children may be able to take care of their aging parents.
Another added perk for buyers like Leticia Galvez is they may be able to afford larger, more expensive homes when purchasing with other family members.
"I couldn't imagine my dad being 73 after raising all of us and trying to figure out how he's going to survive,” said Leticia Galvez, 36, who works in the administrative office of a local brewery. “I could just get a four-bedroom and we could do it together."
Multigenerational buyers may be able to afford pricier homes
Initially, Galvez and her husband could only afford a three-bedroom home on their budget. That left them unsure of how to accommodate her father.
In addition, their credit scores needed to be higher to qualify for California's down payment assistance programs.
"Our credit wasn't bad, but it wasn't the best. So, we didn't qualify to get any of the California programs,” says Galvez.
She worked with her New American Funding loan officer, Dusty Lloyd, who suggested adding her father to the loan. This helped the family qualify for a higher loan amount.
With three adult borrowers, they secured a loan for a four-bedroom home, securing enough space for everyone in the family.
The family closed on the home in mid-May.
“My dad is a great roommate and fantastic in the kitchen,” Galvez. “I can always count on him to help watch my son, care for our huskies, or feed our cat.”
Why more buyers are choosing multigenerational homes
Multigenerational homes have long been more popular with Asian, Black, and Hispanic Americans as well as foreign-born individuals, according to the Pew Research Center.
Now, more non-white buyers are purchasing multigenerational homes, says Jessica Lautz, deputy chief economist at the National Association of Realtors.
The highest percentage of these buyers are members of Generation X, often referred to as the sandwich generation, according to Lautz. They may be simultaneously caring for aging parents and young children.
About 18% of the U.S. population, nearly 60 million people, lived in multigenerational households in 2021, according to the Pew Research Center. This was up from 7% in 1971.
Coming out of the pandemic, many families have been hesitant to move elderly parents into nursing homes or assisted living facilities if they can stay with family instead.
Additionally, rents remain high. That makes it difficult for many young adults to move out on their own.
Nearly half of young adults between ages 18 and 29 lived with their parents in 2021, a high not seen since the Great Depression, according to research from the Wharton School at the University of Pennsylvania.
“It’s very hard for young adults to find an independent place to live that they can afford and meet all of their other financial goals as well,” says Lautz.
Builders are putting up more multi-family homes
Builders are now getting in on the multigenerational trend by putting up homes designed for these families, says Lautz.
About 45% of buyers preferred a multigenerational home in 2023 compared to 39% in 2020, according to a 2024 report from the National Association of Home Builders.
"These homes often feature attached apartments that provide private living spaces, even if they lack a full kitchen,” says Lautz. “Families are also purchasing larger homes to ensure enough room for everyone."