Multigenerational living is on the rise, but it can be tricky
Multigenerational living is a common practice in many countries, including in America.
Prior to World War II, many extended families, particularly those of recent immigrants, lived together under one roof. After the war, though, a shift toward independent living took hold, spurred in large part by the rise of relatively inexpensive housing in the suburbs.
But the practice never went away entirely. And over the last few years, it has gained steam because of a number of factors — the pandemic and high housing costs, among them. According to the Pew Research Center, “the number of Americans living with multiple generations under one roof has quadrupled” to some 59 million over the last 50 years.
For the most part, multigenerational living involves adult children, plus one or both parents and/ or grandparents. Sometimes it’s a young adult returning to the nest after college or after a divorce. Sometimes it’s siblings choosing to live together, maybe to care for each other’s children or to pool resources while each saves for their own places.
MORE HOMES BUILT AS MULTIGENERATIONAL
The National Association of Home Builders reports a steady increase in the share of houses built with two or more main suites
According to the latest, yet-to-be-published NAHB survey, 45% of all buyers would prefer to buy a multi-generational home. But there are differences among ethnic groups: Just 37% of white respondents said they would want such a place, compared with 72% of Latinos, 71% of Asian Americans and 61% of African Americans.
In the resale sector, 14% of all buyers are multigenerational, according to the latest figures from the National Association of Realtors. Whether it’s young roommates or senior citizens, “people are supporting each other,” says NAR Deputy Chief Economist Jessica Lautz.
If you already own a place, you really don’t have to worry about financing if you want to bring a parent or an adult child in under your roof. But if you are buying a place together, there are rules.
MORTGAGE RULES
For one thing, lenders want to know who’s going to be living in the house, Stephen Trye of the Paramount Residential Mortgage Group in Baltimore tells me. If you cannot show that the house is the additional family member’s principal residence, for example, it could be considered an investment property — the financing for which comes with higher interest rates and other restrictions.
To secure the best deal, you need to show that the relative cannot afford to buy a house on their own. You can use whatever income the person has to help qualify for the loan, but if you do that, you also have to include their debts in the all-important debtto-income ratio.
Only one person need be on the mortgage, as long as that person actually occupies the house. And if your relative is unable to work or does not qualify for a mortgage on their own, you are considered the owner/occupant for financing purposes.
Finally, a warning: Merging different generations into one household doesn’t always work out. “It’s not always a good idea,” says agent Francie Stavish, a certified senior adviser in Illinois.
”It’s not like it used to be when (multigenerational living) was the norm,” Stavish said. “Seniors are not as big on sharing as they once were, and some don’t like to share information about their financial and medical situations. That’s important information their adult children sometimes need to know.”
She says that aging parents sometimes feel like they’re being treated like children. And a survey by Rocket Mortgage found that differences of opinion can lead to friction.
Privacy is a big concern, too — the No. 1 issue in multi-gen households, Rocket’s survey found. Stavish says seniors often feel they aren’t given the privacy and respect they deserve. That’s why she recommends that each family have their own doors to the outside.
She also suggests that families work with a neutral third party with whom each person can share their concerns.
Merging families can be tough for anyone. So keep the lines of communication open, establish clear boundaries and rules, respect each other, and be patient.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housingfinance industry publications. Readers can contact him at lsichelman@aol.com.
First days are magical in their promise. They are thresholds and entryways, tickets to the litany of all the other days that follow. I know this because I’ve enjoyed several. First day of school. First day at work. First day as a wife, mother, grandmother.
This broiling month of August has seen plenty of firsts, most notably witnessing my grandkids march into their first day of school with so much excitement. From the fashion conscious highschoolers to the excitedabout-my-lunchbox 4year-old, the enthusiasm was contagious.
New teachers! New classrooms! New clothes! New notebooks and duotang folders!
I remember well the prep for this annual endof-summer rite, my own and my children’s. While no one looked forward to the early morning wakeups then (or now), there was still a joy and an anticipation to this seasonal beginning. Anticipation braided with anxiety and sprinkled with suspicion, but mostly anticipation.
“I like all my teachers except one,” reported one of the twins after her first day. Then she paused, as if thinking over her words. “And maybe that teacher’s not so bad. It’s only the first day. Maybe she wants to make sure we all do what we’re supposed to.”
By the time you get to