Multi-generational homebuying is nearing an all-time high, according to the National Association of Realtors‘ Profile of Home Buyers and Sellers report. In 2022, multi-generational homebuying increased to 14%, up from 11% in 2021, according to the report.
The report, which is an analysis of survey data related to buyer characteristics, showed that 15% of first-time buyers and 14% of repeat buyers chose to buy a multi-generational home last year.
In March 2020, just prior to the COVID-19 pandemic, multi-generational homebuyers accounted for 11% of all buyers. However, from April to June 2020, the percentage of multi-generational buyers increased to 15%.
Why buyers are purchasing multi-generational homes
There are a number of reasons for the uptick in multi-generational home purchases, according to the report, including caring for aging parents or relatives, adult children or relatives moving back home, and to save on costs.
Cost-saving was a priority in particular for first-time buyers (28%), per the report. NAR attributed this, in large part, to needing multiple incomes to afford a home. About 26% of first-time homebuyers said saving for a downpayment was the most difficult step in their homebuying process.
Per the data in the report, 30% of first-time and repeat multi-generational homebuyers stated that the purchase decision was made in order to take care of or spend more time with aging family members.
The report also found that 78% of recent buyers financed their home purchases, a drop of about 9% from 2021, when 87% of buyers financed their homes. First-time home buyers also put down significantly less money on their home purchases, with an average of a 6% downpayment compared to 17% for repeat buyers.
Buyer demographics
Of the buyers surveyed, members of Gen X (born between 1965-1979) were the most likely to buy a multi-generational home, the report found. This generation, according to NAR, needs bigger homes because they experience two trends at the same time: caring for aging relatives and adult children moving back home.
Per the report, it is also more common for minority buyers to purchase multi-generational homes. The report found 18-19% of minority buyers were more likely to buy multi-generational homes — compared to just 10% of their white or Caucasian counterparts.