Gen X are now most likely to buy a multi-generational home

With many young adults unable to afford their own home, many are moving back to their parents’ home or have never left.

More than half of the 1 in 6 Generation X homebuyers who have purchased a multi-generational home said it was due to adult children living with them.

Gen X are now the most likely cohort to buy a multi-generational home, overtaking younger Boomers according to the Realtors 2019 Home Buyer and Generational Trends Survey from the National Association of Realtors.

"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.

Of the 9% of Millennials who bought a multi-generational home, a third did so because they are caring for older parents while 30% want to spend more time with their parents.

"While these multi-generational homes may not be what a majority of Americans expect out of homeownership, this method allows younger potential buyers the opportunity to gain their financial footing and transition into homeownership,” added Yun. “In fact, younger millennials are the most likely to move directly out of their parents' homes into homeownership, circumventing renting altogether."

Millennials leading homebuying
Millennials were the largest buyers of all home types (37%) with younger Millennials (11%) now accounting for a larger share of homebuyers than the Silent Generation (7%) but buying the least expensive homes ($177,000) and the smallest (1,600 square feet). They also report a median household income of $71,200.

Older Millennials account for 26% of homebuyers.

"Older millennials are now entering the prime earning stages of their careers, and the size and costs of homes they purchase reflect this,” said Yun. “Their choices are falling more in line with their Gen X and boomer counterparts."

Gen X buyers were the second largest group of buyers (24%), followed by younger boomers (18%) and older boomers (14%).

Student debt burden
Older Millennials and Gen Xers carry the most substantial amount of student loan debt (median $30,000) but younger millennials are the most likely to have student loan debt (47%).

Unsurprisingly young Millennials were also the most likely to say saving for a down payment was the most difficult task in the home process (26%).

“These buyers are the most likely to receive some or all of their down payment as a gift from family or friends, usually their parents," says Yun. "This could explain why their debt is not holding them back from homeownership as long as other generations, who are less likely to receive down payment assistance."