Families have always come in many forms and sizes, and now the housing market is changing to reflect that variety. While the majority of homes are still sold to individuals or couples, a record high amount of homebuyers (17%) purchased multigenerational homes in 2024.* This brings families together in both a shared investment and a shared household, which can benefit everyone.
While many families (36%) bought together for cost reasons, others included households with aging parents, children or relatives who have moved back home, or children over 18 who never left home.* By sharing costs, families can afford a bigger home, but they can also share caregiving responsibilities and provide mutual support.
Of course, this approach isn’t right for everyone. Before embarking on a major, long-term financial investment like this, families should ask a lot of questions and have some frank, emotional discussions. It may even be helpful to have a family counselor walk everyone through vital questions like:
How much will each person pay? Finances for those in peak earning years are very different from retirees on a fixed income or young people just starting out. This can lead to questions about how to allocate space or who will be listed on the deed. Are all members co-owners or are some tenants? Talk to an attorney about all the options, and put an agreement in writing (yes, even with family members). An attorney can also help you understand zoning laws and permitting regulations if applicable.
What do everyone’s finances look like? Each person who will be on the mortgage will need to pass checks for credit scores, employment, and debt-to-income (DTI) ratios. It can be awkward to talk money with family, but this is a critical step, and it can serve as an introduction to other types of conversations that will be needed throughout this process.
What are your mortgage options? Here’s where a Loan Officer comes in. In addition to explaining how each person’s finances might affect loan approval, your Loan Officer can introduce you to various loan products and help you find the best mortgage for your needs.
What is your budget? Home price is just the beginning. In addition to utilities, there will be property taxes, maintenance, homeowner association fees, and other expenses. How will these be divided, and how much can each person afford to pay?
What are everyone’s priorities for a home? Odds are, there will need to be a lot of compromises here. Start by identifying each person’s “must haves” and “nice to haves” so you can narrow your search. The more common ground you share, the easier your search will be!
What will life under one roof look like? You’ll be sharing common spaces, chores, design choices like paint color and furniture, and so much more. How will decisions be made, and how can you deal with conflict? Even the closest families can feel strain when they’re all under one roof. Go in with your eyes wide open and possibly a written agreement on house rules.
What happens when things change? A single person may get married, or an adult child may choose to strike out on their own. This may change either family dynamics within the house or each person’s financial obligations. Additionally, the death of one of the owners will change the ownership structure. Here’s where pre-purchase advice from an attorney could be critical, because it can prepare you for legal implications. But you’ll also want to talk about these eventualities within the family before you make a decision to buy together.
Comments