Benefits of Multi-Generational Homebuying: Why Families are Choosing to Purchase Together

Benefits of Multi-Generational Homebuying: Why Families are Choosing to Purchase Together

According to a recent report from the National Association of Realtors (NAR), the percentage of multi-generational families buying homes together increased from 11 percent to 14 percent between 2021 and 2023. This trend reflects the growing appeal of purchasing property as a family unit, driven by several key factors. 

Younger generations are increasingly interested in caring for their elders, acquiring homes that might otherwise be financially out of reach, or simply spending more time with loved ones. The spike in housing prices during the COVID-19 pandemic has also contributed to the rise in multi-generational homebuying, as younger professionals team up with parents or grandparents to achieve the dream of homeownership.

Key Benefits of Multi-Generational Homebuying

The NAR survey highlights several benefits of multi-generational homebuying. Among first-time buyers, "cost savings" and the desire for a "larger home" were the top reasons, each cited by 28 percent of respondents. For repeat buyers, "caring for an aging parent" was the most popular reason, with 23 percent citing this motivation.

Additionally, 23 percent of first-time buyers reported never having left home, and 15 percent expressed a desire to spend more time with their parents. Among repeat buyers, 19 percent mentioned that adult children had moved back home.

Overall, the most significant combined statistic for both first-time and repeat homebuyers was the desire to afford a larger home, with 46 percent of respondents choosing this option.

Gen X, defined by the NAR as those born between 1965 and 1979, is the generation most likely to participate in multi-generational homebuying. This demographic overlaps two key groups: those seeking to care for aging parents and those whose children have either not yet left home or have recently returned.

Addressing Potential Challenges

While there are many positives to multi-generational homebuying, it’s essential to address potential challenges early on. For instance, while having multiple people contribute to the mortgage can be beneficial, it’s crucial to establish how much each person will contribute and determine who gets which room or unit in the property. 

Shared spaces can also be a point of contention, so it may be helpful to create schedules for using common areas. Similar to starting a family business, financial matters can become heated, so it’s wise to have open discussions early on and seek professional advice when necessary, as homebuying can be a complex process.

Understanding Ownership Rights

It's also important to understand the ownership rights of each family member, especially when planning for future events like selling the home or in the event of a family member’s passing. Consulting a lawyer to agree on the form of ownership—such as joint tenancy, tenants in common, or another structure—can help ensure everyone is on the same page.