Despite the US per capita GDP increasing from $5,609 in 1971 to $69,288 in 2021, property ownership isn’t as popular as it once was. Instead, the growth of multigenerational households has increased remarkably since 1971.
According to Pew Research, in the early ’70s, roughly 5% of Americans lived in multigenerational homes, mostly with parents or other adult relatives. However, by 2021, that figure rose to 18%.
Economic issues are partly responsible for this trend. 40% of people living in a home with two or more generations told Pew that financial issues were behind their decision. A related survey by Generations United (GU) found that 66% of people considered economic factors at least partially responsible for their decision to live with parents, children, or other adult relations.
Even though living in a multigenerational home is not necessarily a new concept, its recent popularity has made many realize that this particular living situation comes with its pros and cons.
If you are living in this type of household or considering a move, there are advantages you will have to look forward to and drawbacks you may have to contend with.
Pros of multigenerational homes
Most of the coverage related to multigenerational living focuses on the arrangement’s financial advantages for younger adults. While this is the single most prevalent reason for returning home, this living situation comes with plenty of other positives — all of which benefit the entire family.
Here is a closer look at the positive aspects of living in a multigenerational home.
Whether you are financially motivated to move into a shared household or not, you can’t deny the economic advantages. With multiple adults sharing mortgage or rent payments, bills and food costs, each can enjoy a lighter share of the financial burden. Multiple contributors can help each individual get by even if they have a tight household budget.
The low-pressure finance dynamic of shared households also makes it easier to put money away for essential needs. The extra savings can help with paying off credit card debt, paying down student loans, or purchasing necessities like a vehicle.
Depending on your previous living situation, moving to a multigenerational home can mean more space for less money overall. For example, if you previously rented an apartment and have moved into a family home, you may have access to a yard, parking space, and a larger kitchen.
Financing a home
Young people, in particular, may benefit financially. Some may even move back to their family’s household while they build up their savings to purchase their own home.
The money-saving aspect of this living situation can help you pay down credit card debt or student loans, catch up on overdue bills, and take other steps to increase your credit score.
Along with credit score improvement and savings, self-employed people and job searchers can benefit from a shared home situation because it will provide time to collect the information needed for a mortgage application.
Lenders may ask for pay stubs and could balk at the inconsistent income of a freelancer or small businessperson. In these cases, you can document long-term earning trends by building a collection of income tax documents, bank records, and financial statements over a year or two. This evidence can help immensely with the loan application process.
When you compare costs by location, childcare is extremely expensive everywhere. In most of the country, working parents spend more on childcare than they do on housing.
So, it should come as no surprise that saving on daycare is a significant advantage of a multigenerational household. The other adults in the home may be able to pitch in with some duties, such as picking up the kids after school, babysitting in the evening, or helping prepare meals while mom and dad are at work.
The shared responsibility might not eliminate the need for babysitting and daycare services, but it can reduce childcare costs so that they do not eat up the largest portion of your income.
Another positive is that relatives, such as parents or grandparents, are typically more trusted than unrelated daycare workers or babysitters. Family members can provide more peace of mind to parents worried about who is caring for their kids.
Build family relationships
Multigenerational homes provide ample opportunity to develop tight bonds with other family members. For example, grandparents can spend more precious time with children and provide help in developing their emotional maturity, positive behaviors, and healthy habits.
At the same time, adults can supply support and offer advice to each other to help deal with the difficulties and challenges of everyday life.
Finally, when generations live separately, they typically only meet and interact on special occasions. However, family events can be more spontaneous in this type of situation. Shared time through regular interactions during mealtime or on weekends can lead to deeper connections.
Shared homes also set the stage for deeper relationships between younger and older relatives. Not only might these connections benefit the mental and social well-being of older family members, but they can also prolong their lifespan.
A study published in the journal BMC Public Health found that elderly parents who played a vital role in their children’s lives lived longer than those with poor family relationships, who had a 30% higher mortality rate.
For older family members in multigenerational homes, they may feel useful by helping with housing, assisting financially, providing childcare, or giving emotional support and advice. Through these efforts, they may feel more involved in a reciprocal relationship with the rest of the family.
Financial security for the elderly
Though many young people choose a multigenerational home so that they can get out of debt or save for a home, the arrangement can also provide financial benefits to other family members as well.
As they prepare for retirement, many people need to adjust their finances. Children can help their parents prepare for retirement and offer financial support by chipping in with bills, mortgage payments, access to vehicles, and daily expenses.
Even if they have pension or retirement accounts, retirement-age family members may appreciate the financial security of having other earners in the household as they make the transition into their post-career life.
Cons of multigenerational homes
The significant advantages of shared homes can make living with family members seem like a great idea. However, there are drawbacks to be aware of when considering this option.
Depending on your preferences, current financial situation, and family relationships, these disadvantages could be deal-breakers. But if you put in an effort to get along, you can resolve issues with the other adults in the household and happily cohabitate.
Lack of privacy
Privacy-related issues are a common concern when people are deciding if home-sharing is a viable option. Though family members may have separate personal spaces, such as bedrooms, they will all live in the same building. So, don’t count always on keeping your issues, habits, or troubles to yourself.
For example, the entire household may be aware of an argument between a couple, which creates tension in the home. This may also cause family members to take sides in the argument, causing even more strife.
Some household members may feel like they do not have the space to pursue hobbies or relax in the way they want after work or on the weekend. Another issue that could arise is when elderly relatives and parents disagree about the nuances of how to raise, discipline, and teach their children.
If the lack of privacy leads to conflict or embarrassment, it could cause people to question whether a shared house was the correct choice. However, solutions such as designating private areas in the home and directly addressing the issue with other housemates could lead to solutions.
Personality conflicts are common in all group settings. Disagreements in a shared living space are unavoidable at some point, even if family members typically get along.
Different generations may have divergent values, which could exacerbate disagreements and lead to additional conflicts. In some cases, house members may feel they have to walk on eggshells or act in a specific way to avoid conflict. Others in the family may offer opinions freely and provide unsolicited advice even if it causes disagreements.
It might be possible to proactively address potential problem areas. For example, family members could agree not to discuss certain topics with each other or offer unsolicited advice about raising children, politics, religion, or other potentially controversial topics.
Smaller living space
Space is another issue. Depending on the size of the home, it may be impossible for every individual to find the level of privacy they need. Also, there could be practical issues, such as not having enough bathrooms for everyone to get ready for work and school in the morning.
Shared common areas and limited entertainment systems may mean that some people cannot relax uninterrupted when they want to watch their favorite series or sporting events.
Solutions to this issue could be limited by square footage. While it might be possible to convert unused space in a basement or attic into living quarters, significant renovations may be beyond the budget of house members.
Finally, multigenerational homes may bring additional responsibilities to some house members. The extra burden could be financial or involve adding duties to an already-busy daily schedule.
The level of responsibility can vary significantly depending on the living arrangement. Younger members of the family may need to provide daily care for an older parent or grandparent. Older residents may find themselves with childcare duties that they find exhausting.
Also, family members with a higher income may need to shoulder a larger portion of the financial burden. They could find the arrangement unfair, or it might interrupt their saving or debt-payment plans.
Multigenerational homes can provide financial advantages and lead to better family connections and a built-in support system. At the same time, some drawbacks could make such an arrangement challenging if they are not dealt with before you make the move.