The popularity of multigenerational homes increased over the last year, as a rising number of homebuyers purchased larger residences compared to prior years, including millennials who continue to make up the largest share of homebuyers at 37 percent. This finding is revealed in the National Association of Realtors®’ (NAR) most recent study on the characteristics of homebuyers, the 2021 Home Buyers and Sellers Generational Trends report.
Millennials have been the largest share of buyers since NAR’s 2014 report. The most recent data shows that 82 percent of younger millennials and 48 percent of older millennials were first-time homebuyers, more than other age groups.
According to the study, during the last year, 18 percent of homebuyers between the ages of 41 to 65 purchased a multigenerational home – a home that will house adult siblings, adult children, parents or grandparents.
“There are a variety of reasons why large families and extended families are opting to live together, one of which is that it’s a great way to save money,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “Also, in light of the pandemic, many grandparents and older relatives found that being under a single roof – quarantining with family rather than away – worked out better for them.”
Homebuyers ages 75 to 95 were the second most likely to purchase a multigenerational home, and were most likely to purchase senior-related housing, at 27 percent.
In terms of buyer characteristics, 19 percent of older boomers – buyers between the ages of 66 and 74 – and 18 percent of Generation Xers – buyers ages 41 to 55 – were most likely to purchase a new home to prevent having to do renovations or avoid plumbing or electricity problems, and these buyers prioritized having the ability to choose and customize design features.
Seventeen percent of buyers who are part of the silent generation – those between the ages of 75 to 95 – purchased newly-built homes. These buyers were least likely to compromise in their home search and least likely to purchase a detached single-family home.
Among all sellers, the most commonly cited reason for wanting to sell their residence was a desire to move closer to friends and family (15 percent), followed by the home being too small (14 percent) and a change in family situation (12 percent).
The largest share of all home sellers were baby boomers, at 43 percent. Sellers aged 55 and younger often upgraded to a larger and more expensive home while staying relatively close to their prior home. Sellers 56-years and older regularly purchased a similarly-sized home, but less expensive than the home they sold by moving farther.
Overall, sellers stayed in their previous home for a median of 10 years before selling, with a median of six years among sellers ages 31 to 40, and a median of 16 years among sellers 66 and older. Recently sold homes were generally on the market for a median of three weeks.