In 2024, multigenerational homebuying reached a record high, accounting for 17% of all home purchases, according to the National Association of Realtors® 2024 Profile of Home Buyers and Sellers. The primary reasons for this trend included cost savings, caring for aging parents, adult children moving back home, and supporting children over 18 who never left.
Living in a multigenerational home offers numerous benefits, such as fostering close family connections, reducing housing-related expenses, and saving on elder or childcare costs. Families in such arrangements often experience greater financial stability while enjoying the companionship of loved ones.
However, finding a home suitable for a multigenerational household can be challenging. Here are three steps, shared by Bob Hay, 2008 PAR president, to help guide the process:
1. Discuss Your Plans
“Before starting your house hunt, sit down as a family to align your goals and expectations,” advises Hay. “Have you discussed what you’re looking for in a new home? Are you prepared to make compromises? Have you addressed any concerns about the move?”
Hay suggests articulating your reasons for purchasing a multigenerational home and identifying how everyone will benefit. “For some families, it’s about caregiving and shared responsibilities. For others, it’s pooling resources to afford a better property or save on childcare or senior living costs,” he explains.
He also emphasizes considering both immediate needs and long-term issues like accessibility or financial challenges. “Realtors® can help by consulting individually with family members and providing realistic options in today’s housing market,” Hay notes.
2. Create a Joint Budget
“Once your family agrees on what you want in a home, the next step is drafting a joint budget,” says Hay. “This ensures no one becomes overextended financially. Look at the bigger picture, including the cost of purchasing and maintaining the property.”
When budgeting, consider the home’s size and layout. Multigenerational homes often require ample space and privacy. Some families may opt for properties that allow renovations or additions to meet their needs.
“When touring properties, we can help estimate potential costs and determine if it’s a smart investment,” Hay shares. “We can also connect you with trusted contractors for renovations.”
3. Apply for a Mortgage
“Buying a home with family members can be complex, especially if you’re jointly applying for a mortgage,” Hay explains. “However, combining financial resources may make it easier to qualify for certain loans than going solo.”
He recommends consulting a mortgage lender or broker to explore your options. “We can connect you with professionals who specialize in co-buying and understand the unique challenges involved,” Hay adds.
All family members should check their credit, as it plays a critical role in qualifying for a mortgage. Reviewing credit reports early helps identify and resolve any issues in advance.
Hay also suggests discussing key questions:
- Who will be on the mortgage?
- How will the title be handled?
- Can including everyone on the mortgage lower your rate?
- For those who don’t qualify or have lower credit scores, are there other ways they can contribute financially?
Realtors® can assist multigenerational families by understanding their unique needs, finding suitable homes, guiding them through the buying process, and connecting them with trusted financial and legal resources.