During the holidays last year, we learned that my sister’s family was struggling to pay their mortgage. At the same time, my parents were having trouble maintaining their home and getting around.
For us, the solution was simple.
My sister’s family sold their house and moved into my parents’ home. My sister and her husband pay rent and a portion of the household expenses. Her husband shops and cooks; she oversees health appointments and medications.
The arrangement allows my parents to stay in their home, which was important to them. My sister’s family is starting to save for a new home, and both families are enjoying their time together.
What’s Old Is New Again
Living together in multigenerational households like this is a growing trend – but not a new one. In 1950, multigenerational homes accounted for 21% of U.S. households.
That percentage dropped decades later, reaching a low of 12% by 1980. Since then, multigenerational living has increased. By 2014, a record 60.6 million people – or 19% of the U.S. population – were living in such households, according to a Pew Research Center analysis of Census Bureau data.
Why It’s Happening
For some families, like mine, the choice was economic. Sharing household expenses across generations make them more manageable, according to Generations United, a group dedicated to improving the lives of children and older adults through intergenerational programs and services.
But other factors are in play, too.
“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, executive director of Generations United, in a Forbes article.
And it’s also considered the norm in some cultures, especially Asians and Hispanics. According to a CNBC report, as immigrants from these cultures move to the U.S. in greater numbers, they “bring the trend along with them.”
While my parents’ home was large enough to accommodate two families, some homes aren’t.
Home builder Lennar, which introduced its NextGen homes in 2011, and Pardee Homes, a division of Tripoint offering the GenSmart brand of multi-gen homes, are building new homes designed to be shared with separate private entrances, eating, and sleeping areas, and common living areas.
“The idea is that the family can live under one roof, but not entirely together,” notes MSNBC’s Diana Olick. Small, local builders say they are getting more requests for these floor plans as well, according to Olick.
Fannie Mae, too, has responded with its HomeReadyÒ mortgage, which lets lenders consider non-borrower household income to help applicants qualify for a loan with up to a 50% debt-to-income (DTI) ratio. 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%.
Should the subject of sharing homes come up during events or family gatherings, we hope this information will be helpful. Do you live in a multi-gen house? What are some tips you have for others facing a similar home dynamic?
Laura Haverty is an author of three nonfiction books and a journalist who spent more than 25 years in the publishing industry. As Fannie Mae’s editor in chief, she covers housing industry news and trends. Follow Fannie Mae on Twitter, Facebook and LinkedIn.
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