Over the past few years, homebuyers have navigated a challenging housing market marked by rising prices and stubborn mortgage rates. These factors have made young buyers hesitant, leading many to postpone buying a home as they wait for housing conditions to improve.
Ongoing market gridlock and broader economic uncertainty have further weakened buyer confidence this year. As a result, homebuyers are seeking alternatives to afford rising housing costs and care for aging family members.
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Multigenerational family homes were common until the mid-19th century, when suburban construction and housing affordability improved.Ā However, multifamily homes may be making a resurgence.Ā
Berkshire Hathaway Home Services anticipates housing construction and homebuying may soon shift back toward multigenerational living.
As the cost of living rises, Berkshire Hathaway expects more homebuyers are considering multigenerational living to save on housing costs and ensure care for aging family members.Ā
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Berkshire Hathaway Home Services highlights how multi-family homes can boost housing market activity
Several generations of families living together was the norm until post-World War II economic prosperity and widespread suburban construction prioritized the nuclear-family household.
In 2010, there wereĀ 5.1 million multigenerational households, but by 2020 that figure jumped to 6 million. As average home saleĀ pricesĀ continue to surpass $500,000 andĀ mortgage rates inch back toward 7%, housing market exerts anticipate more homebuyers seeking multifamily homes.
Pooling resources, splitting finances, and caring for aging family members are among the top reasons homebuyers are looking to live with extended family. However, Berkshire Hathaway Home Services believes the shift towards multigenerational homes could boost the housing market.
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“Many housing industry professionals view multigenerational families as an untapped market for homebuilders, but itās a goldmine for remodelers who can figure out how to design comfortable, ergonomic, and energy-efficient updates for multigenerational family homes,” theĀ Berkshire Hathaway Home Services blog noted.
“Features that would make the home more functional are flexible living spaces for both privacy and togetherness, separate entrances and living quarters for adult generations, and universal design elements with accessibility for seniors and disabled household members.”
However, the blog highlights that finding sufficient inventory to match demand for multigenerational homes may be the biggest roadblock. “Perhaps the biggest challenge is that most existing homes for sale as well as new homes by builders are designed for the majority of homebuyers ā the single family.
Berkshire Hathaway Home Services believes multigenerational family homes may solve the affordability crisis
Nearly half of all renters āĀ over 21 million households ā are cost-burdened, spending more than 30% of their income on housing. Young homebuyers and renters saving for a home often cite the cost of living and lack of affordability as the biggest barriers to homeownership.
Living with parents and other extended family members allows prospective homeowners to split the bulk of housing costs, including mortgage payments, home insurance, and maintenance costs.
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“Sharing expenses takes pressure off individual household members, especially for those priced out of homes to rent or buy,” the Berkshire Hathaway Home Service blog wrote.Ā
Cutting down on monthly housing costs can allow homeowners to focus on other expenses, such as paying down credit card debt, student loans, and building an emergency savings fund. The blog highlights that “surpluses can go to toward purchasing a home, paying for tuition and student loans, and providing more basics and comforts.”
Having several generations under one roof can help younger homeowners save on housing costs and receiving help with childcare, while preparing to eventually take care of aging family members.
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