Hi Mom...I am moving back home!
According to the National Association of Realtors’ 2019 Home Buyer and Seller Generational Trends, one in six Gen Xers purchased a multi-generational home, with 52 percent of those Gen X buyers indicating they did because their adult children have either moved back or never left home.
“The high cost of rent and lack of affordable housing inventory is sending adult children back to their parents’ homes either out of necessity or an attempt to save money,” says Lawrence Yun, NAR chief economist.
The study, which evaluates the generational differences of recent homebuyers and sellers, found older millennials have more similarities with Gen Xers and younger boomers, as this group also appears to be leaning toward the purchase of a multi-generational home. Older millennials who bought a multi-generational home (9 percent) were most likely to do so in order to take care of aging parents (33 percent), or to spend more time with those parents (30 percent).
Gen X typically refers to the group born between the mid-1960s and early 1980s. Gen Y, also known as millennials, refers to the group born between the mid-1980s and 2000.
Alan Barbic, president of the Silicon Valley Association of Realtors, is seeing both trends in the Bay Area. “With rents rising and housing affordability challenging, we are seeing families moving in together and seeing it as an advantage,” says Barbic. “Parents want to help their children save so they can someday afford their own home. Older millennials want to take care of their parents. Some bookended boomers are helping their children on one end and their parents on the other.”
Barbic adds, “Many municipalities are now easing restrictions allowing secondary units to be built on single-family residential properties, which helps families and alleviates the growing lack of housing at the same time. These reasons also point to the family unit being important to many Americans.”
Millennials as whole account for the largest share of buyers, at 37 percent. Older millennials account for 26 percent of buyers, Gen Xers 26 percent, younger boomers 18 percent, older boomers 14 percent, younger millennials 11 percent, and the silent generation, 7 percent.
Older millennials have a median household income of $101,200 and purchase homes with a median price of $274,000. Younger millennials, with a median household income of $71,200, are buying smaller and the least expensive homes.
“Older millennials are now entering the prime earning stages of their careers, and the size and costs of homes they purchase reflect this. Their choices are falling more in line with their Gen X and boomer counterparts,” explains Yun.
Interestingly, downsizing to a smaller home is not currently common among any of the generations. The study speculates Gen Xers and boomers who may have been interested in downsizing could have been hindered by a lack of smaller inventory; or may have been impeded by the increase in multi-generational living to accommodate the needs of adult children and aging parents.
The survey also reveals buyers and sellers across all age groups (87 percent) continue to seek the assistance of a real estate agent when buying and selling a home. “Help understanding the buying process” was cited as the top benefit younger millennials said their agent provided.
“These days buying a home is a complicated process. It’s a tough market and there are many documents to wade through,” says Barbic. “You can start your home search online, but ultimately, buyers and sellers turn to the Realtor because Realtors have the knowledge and expertise to guide them through the transaction.”