Multigenerational housing is making a comeback. After decades of decline, the number of Americans living in multigenerational households dropped to roughly 26 million in 1970. Since then it’s more than doubled; currently there are an estimated 60 million Americans (18%) living in a home with three or more generations. This article examines the reasons behind this trend and also provides a look at the new types of homes being built to accommodate multigenerational families.
According to data from the American Community Survey (ACS), the number of Americans living in multigenerational households in 2012 was 57 million, or 18.1% of the total population. These 57 million Americans occupied 4.3 million homes. That accounted for 5.6% of all occupied homes in the United States. That’s up from 3.7% of occupied homes in 2000.
Multigenerational households were more common at the beginning of the last century, but declined significantly following World War II. During this time the United States experienced a period of economic expansion which manifested itself in widespread suburban development and an increased supply of single family homes. With home ownership as national policy, mortgages became widely available. In addition, suburban growth and a ready supply of spec homes across the nation accommodated a highly mobile workforce, resulting in many families being spread across several states.
Multigenerational households were more common at the beginning of the last century, but declined significantly following World War II. During this time the United States experienced a period of economic expansion which manifested itself in widespread suburban development and an increased supply of single family homes. With home ownership as national policy, mortgages became widely available. In addition, suburban growth and a ready supply of spec homes across the nation accommodated a highly mobile workforce, resulting in many families being spread across several states.
Another important factor was the decrease in the percentage of foreign born Americans. First and second generation Americans tend to make up a significant portion of multigenerational households, for both economic and cultural reasons. As the number and percentage of foreign born Americans decreased, so too did the number of multigenerational households. Conversely, the rebound of the foreign born American population has also coincided with a rise in multigenerational households.
ACS data provides a breakdown of multigenerational households by race. Non-white households are nearly three times as likely to be multigenerational. This is important considering that non-White households are projected to provide all of the population growth over the next 40 years.
The following two maps depict the frequency of multigenerational households by County and by State. As can be seen, those areas with the highest foreign born populations tend to have the highest percentages of multigenerational households.
The affordability of housing also plays a significant role in the occurrence of multigenerational housing. Unemployment, under-employment, and wage stagnation have had a significant impact on home ownership trends in recent years, particularly among Millennials. According to recent data, in 2014—for the first time in more than 130 years—adults between the ages of 18 to 34 were slightly more likely to be living with their parents than with a spouse or partner in their own home. This underscores the fact that one’s economic situation plays a vital role in the decision to share housing with family.
Ultimately, this begs the question, if/when the economic situation improves for younger generations, will the recent rise in multigenerational households see another reversal? Most likely not. Home prices in most markets are headed to back pre-recession levels, reaching all-time highs. In many cities the competition for housing is fiercer than ever with the rise of dual income households and limits of suburban growth (potential homebuyers will only commute so far). These and other reasons provide a strong financial incentive for families to pool resources and share housing. This is more prevalent where culturally acceptable but even if it isn’t, it’s being considered more and more often. And not just for struggling Millennials. With the cost of senior housing increasing substantially, more and more aging parents are moving in with their adult children.
Ultimately, this begs the question, if/when the economic situation improves for younger generations, will the recent rise in multigenerational households see another reversal? Most likely not. Home prices in most markets are headed to back pre-recession levels, reaching all-time highs. In many cities the competition for housing is fiercer than ever with the rise of dual income households and limits of suburban growth (potential homebuyers will only commute so far). These and other reasons provide a strong financial incentive for families to pool resources and share housing. This is more prevalent where culturally acceptable but even if it isn’t, it’s being considered more and more often. And not just for struggling Millennials. With the cost of senior housing increasing substantially, more and more aging parents are moving in with their adult children.
There are several homebuilders in multiple states who are catching on to this trend. One of the first major builders was the Lennar Corporation, ranked as the 2nd largest homebuilder in the nation in 2015 with 21,004 closings. Lennar’s multigenerational housing is branded as Next Gen, which was launched in Arizona in 2012. Since then, Next Gen have been built in more than 200 communities in 24 markets.
Lennar’s Next Gen: http://nextgen.lennar.com/
Lennar’s Next Gen: http://nextgen.lennar.com/
About the author: Kirby Snideman is an AICP certified planning professional with a focus in economic development and currently serves as a senior market analyst and project manager at CDS. Originally from Houston, Mr. Snideman has lived, studied, and worked in several places including Utah, New York, California, Iowa, Illinois, Oregon, and London, England.
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