by TD Bank
The percentage of multi-generational families buying a home together jumped from 11 percent to 14 percent from 2021 to 2023, according to a recent report compiled by The National Association of Realtors (NAR).
The report explores how the uptick in this type of homebuying is likely due to it serving several purposes, including the ability for younger generations to care for their elders, to get a home that may have been financially out of reach or even just to be closer to family and enjoy the time they have together.
With housing prices having jumped during the peak of COVID-19, it’s not surprising that younger professionals are teaming up with their parents or even grandparents to make the dream of owning a home a reality.
Multi-Generational Home Buying Benefits
The NAR’s survey found that the most popular reasons among first-time buyers were “cost savings” and the desire for a “larger home,” both coming in at 28 percent. The most popular reason for repeat buyers was “taking care of an aging parent” at 23 percent.
Twenty-three percent of first-time buyers also admitted to never leaving home, while 15 percent said they wanted to spend more time with their parents.
For repeat buyers, 19 percent stated that children over the age of 18 moved back home.
The biggest combined statistic for both first-timers and repeat home buyers was the desire to be able to afford a bigger home with both groups combining for 46 percent of respondents using this answer.
Further, the NAR found that Gen X is the most likely generation to be involved in multi-generational home buying. The association defines Gen X as those born from 1965 to 1979, so from ages 44 to 58 roughly. The demographic overlaps two major categories of those looking to buy multi-generational housing —people looking to care for older parents and those whose children might not have left home or came back home recently.
Have the Hard Conversations Early
Some of the positives in multi-generational homebuying, can also be topics of discussion and even dispute.
You may have more people chipping in for a mortgage, but how much is each person chipping in and who gets what room or unit in the property?
There’s also shared spaces, so you might want to come up with schedules and times for every member of the family to use common areas.
It’s similar to starting a business with family in that money is involved and things can get heated, so it’s always best to lay everything out early.
Always get professional advice when needed as well, as homebuying of any kind can be incredibly complicated.
Decide on Ownership Rights
Understanding the ownership rights of each family member is important to plan for future changes such as selling the home or if someone passes away. You may want to consider consulting a lawyer to agree on how the property will be owned such as joint tenancy, tenants in common or some other form of ownership.
(This article is based on information available in May 2024 and is subject to change. It is provided as a convenience and for general information purposes only and is not intended to provide legal, tax, investment, or financial advice or to indicate that a particular TD Bank or third-party product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.)
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