House hunters are snapping up multigenerational homes, and it's reshaping how the typical American family looks
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- 15% of US homebuyers are buying multigenerational homes - the highest in 9 years, per a NAR report.
- The uptick is driven by cost savings - aging parents moving in with their adult children.
- The coronavirus recession is causing a repeat of the rise in co-living seen in the Great Recession.
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American households are becoming one big family.
Fifteen percent of homebuyers have been buying multigenerational homes since the pandemic started, according to a new report by the National Association Realtors (NAR). That's the highest multigenerational homebuying rate since NAR began tracking the metric nine years ago, in 2012, following the Great Recession, when many families began combining households.
Back then, 14% of homebuyers were buying multigenerational homes before it dipped down to 11% a few years later. The percentage has now upticked to its record high of 15% as a consequence of pandemic life, per NAR's report.
Driven by high-risk coronavirus concerns, loneliness, and child care needs, more aging parents are moving in with their children. Income loss and pay cuts also make multigenerational housing appealing for cost-saving purposes.
Also playing a role, but not to as much of an extent, are adult children "boomeranging" back home. More than half (52%) of young adults aged 18 to 29 are currently living at home, NAR reported, citing a Pew Research Center analysis of US Census data. They're not a bigger driving force behind the trend because they likely moved into houses that already had enough space for them, meaning their family didn't need to buy a bigger one.
A repeat of the Great Recession
The increase in multigenerational homebuying will likely cause the average American household size to climb.
In 2018, the average US household size began rising for the first time in over 160 years. Between 1790 and 2010, it declined from 5.79 people to 2.58, according to a Pew analysis of US Census data, but in 2018, it rose for the first time since 1850, at 2.63. (Pew noted that average household size is not available for the years between 1790 and 1850) The trend was most prominent among adults ages 35 and older.
Pew researcher Richard Fry wrote that the previous decline in household size correlated with the decrease in the number of children women were having, as well as fewer extended family living arrangements.
The uptick was likely due to several factors, Fry wrote - including multigenerational households. From 1980 to 2016, the number of Americans living in a multigenerational family household had increased from 12% to 20%.
The Great Recession also left more Americans residing in shared quarters, whether with a roommate or with parents, Fry wrote. The number of shared households increased from 17% to 20% from 2007 to 2019, he said.
It seems that the coronavirus recession is repeating the co-living effect Great Recession, but this time, NAR noted, the shift to multigenerational living might be permanent. That's because it's growing out of the combination of the work-from-home economy with the K-shaped recovery, in which pooling resources helps financially burdened Americans. Having an extra caretaker around for kids in remote school doesn't hurt, either.
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