Multi-gen household growth driven by more than the economy
A renewed focus on multi-generational (multi-gen) living may change how houses are designed and financed in the future.
In 2014, a record 60.6 million people – or 19 percent of the U.S. population – lived with multiple generations under one roof, according to a Pew Research Center analysis of Census Bureau data.
That means that nearly one in five Americans live in a household that includes two or more adult generations and/or grandparents and grandchildren.
It’s a scenario that’s playing out in all demographics. The Pew analysis shows that 28 percent of Asian households are multi-gen, followed by Hispanics and African-Americans at 25 percent each, and whites at 15 percent.
Multi-gen homes accounted for a 21 percent share of U.S. households in 1950. That percentage dropped to 12 percent by 1980. Since then, multi-gen living has rebounded, increasing sharply during and immediately after the Great Recession, according to the Pew Research Center.
“The economic downturn from 2007 to 2009 may have driven families to come together under one roof out of need, but today this increasing multi-gen living is by choice,” says Donna Butts in a Forbes article.
Butts is the executive director of Generations United, a group dedicated to improving the lives of children and older adults through intergenerational programs and services.
Several factors are driving this trend. Millennials – many of whom were hit hard during the recession – are slower to leave the nest and are waiting longer to marry. And many retiring Baby Boomers are eschewing expensive adult communities and choosing instead to live with their adult children.
Another driver is immigration. According to a CNBC report, multi-gen living is common in Asian and Hispanic cultures. As immigrants from these cultures move to the U.S. in greater numbers, they “bring the trend along with them.”
During the Great Recession, many Americans struggled with job losses and reduced income. Sharing household expenses across generations make them more manageable, according to Generations United.
The shift is attracting the attention of homebuilders like Lennar, which introduced its NextGen homes in 2011, and Pardee Homes, a division of Tripoint, which offers the GenSmart brand of multi-gen homes.
Fannie Mae, too, has responded with its HomeReady® mortgage, which lets lenders consider non-borrower household income to help applicants qualify with up to a 50 percent debt-to-income ratio. So, for example, if adult children are paying rent to live in the home, that income can be considered. HomeReady also allows a down payment as low as 3 percent.
HomeReady is an appealing option for many of Efrain Flores’ North Texas buyers, who are predominantly Hispanic.
“I do love this program,” says the bilingual loan officer at Service First Mortgage. “It definitely opens a lot of doors, and [with being able to put 3 percent down] it’s a cost-effective program for buyers.”
Here to Stay?
It appears that multi-gen living is being driven by more than the economy.
“The striking thing is that this really has persisted after the recession,” D’Vera Cohn, a senior writer and editor at Pew Research Center, tells the New York Times. “Perhaps this trend is here to stay.”