Multi-Generational Home Purchases are Trending
You’ve probably heard that in recent times, college graduates are moving back in with their parents. And in many cases, parents are moving in with their children as they age too.
This trend is affecting the home buying market.
According to this year’s National Association of Realtors Homebuyers and Sellers Generational Trends Report, twelve percent of home buyers purchased multi-generational homes. A multi-generational home means a home in which three or more generations of a family live.
A multi-generational home could house a couple, their kids and one of their parents for example. Or a couple with kids could move in with one of their parents.
Why Is the Housing Market Moving Toward Multi-Generational Homes?
While, logically, a larger home is more expensive than a smaller single-family home, when two or more generations are pulling together resources that may not be the case. A larger home might be more affordable for three generations to live in than two-single family homes. Often times, these homes include a mother-in-law suite on the first floor or a guest house in the back. This way, both generations maintain a semblance of privacy, but they can split costs.
However, cost-savings aren’t the only reason why multiple generations may come together under one roof.
For many people, it could be the ease of providing care for an aging parent. It allows families to remain vigilant of their elderly relatives when they’re home for work so that it is less likely for an emergency situation – like a fall – to go unnoticed. More than a fourth of all multi-generational homes came together for this reason.
For others, it’s the ease of having a grandparent at home to take care of their grandchildren while the parent is at work.
And some families just wanted to make the most out of their time together!
Effect on the Housing Market
This trend is interesting because the need to live together is affecting home-buying decisions.
As people move toward purchasing larger homes, it is interesting how this can affect the rent to own market.
In the case of families that come together to care for caretaking of a new child or an elderly relative, it can take a while for both generations’ respective homes to sell. These families can live together in a larger home through rent to own and then easily transition into homeownership once they have the capital from the home sale to put towards a down payment.
Moving from place to place is inconvenient. When an aging relative or a child is in the picture, it is even more difficult for a family to move around from home to home. Rent to own offers them the option to stick with one place and it works for their transitional period.
These are excellent people to lease-option to because, as prior homeowners, they will likely have the capital to purchase the home by the time the rent to own lease term expires.