After months of being cooped up, the pandemic has emphasized the need for space at home and the desire to be close to family.
That’s why it’s not surprising that a new report finds that buyers are buying bigger homes to house multiple generations. This includes homes with enough room for a combination of adult siblings, adult children, parents or grandparents to live together.
In fact, 12% of home buyers purchased a multi-generational home in 2020 — an increase over last year, according to the National Association of Realtors 2021 Home Buyer and Seller Generational Trends report.
“There are a variety of reasons why large families and extended families are opting to live together, one of which is that it’s a great way to save money,” said Jessica Lautz, vice president of demographics and behavioral insights for the National Association of Realtors. “Also, in light of the pandemic, many grandparents and older relatives found that being under a single roof — quarantining with family rather than away — worked out better for them.”
The reasons for buying the larger home included taking care of/spending time with aging parents, accommodating children over 18 who either moved back or never left, and pooling multiple incomes together to save money.
These motivations may explain why Generation X buyers — ages 41 to 55 — were the most likely to purchase a multi-generational home with 18% of Gen Xers buying this type of property.
Of all the groups studied, Generation X also had the most income which may have made it easier to purchase the largest homes compared to other generations. Generation X bought homes with a median of 2,100 square feet and also paid the most for homes with the median price being $305,000.
Wanting a larger home was the most common purchase reason among all generations, only behind the desire to own a home. The need for more space was a particularly strong motivator for older millennials (ages 31 to 40) at 15% and Generation X at 14%.
In addition to trends surrounding the size of a home, the report also found several other trends among generations.
Millennials continue to make up the largest share of home buyers at 37% and were the most likely to be first-time buyers. These younger buyers also reported a tough time finding homes. Nearly six in 10 home buyers between the ages of 22 and 40 said finding the right property was the hardest part of the home-buying process.
Both younger and older millennials were also influenced by location, including the quality of the neighborhood and the proximity to work and family.
“The younger millennials overwhelmingly answered that they prefer to live closer to work, as many don’t want a long commute and this was evident in their buying habits,” Lautz said. “Additionally, both of these groups also placed a high value on being close to family and friends as 57% said that dynamic factored into what neighborhood they ultimately chose.”
Millennials also liked using virtual tours during the pandemic.
“Homebuying aside, this segment of the population was already accustomed to doing research online,” Lautz said. “So, to see them really embrace virtual tours and virtual open houses was a given, nonetheless, real estate agents are the top information source, and the data shows these buyers ultimately used agents to purchase a home.”
Among older groups, type and location of housing was also important. The silent generation (ages 75-95) purchased newly built homes and were the least likely to purchase a detached single-family home. Both the silent generation and older boomers (ages 66 to 74) wanted to be near shopping areas and health care facilities.
The market is also beginning to see Generation Z (ages 21 and younger), which now make up 2% of all home buyers.
To learn more about home-buying trends, contact a local Realtor. Find one at UtahRealtors.com.