What to Know About Buying a Multigenerational Home

For some families, multigenerational living happens unexpectedly — a parent needs support, an adult child moves back home, or circumstances shift.

For others, it’s a deliberate choice. Purchasing a multigenerational home means planning for two or more adult generations to live under one roof, often with grandparents, parents, and children sharing the same space.

And this trend is growing.

Over the past several decades, multigenerational households have increased significantly across the United States. Rising home prices, shifting cultural norms, longer life expectancies, and economic pressures have all contributed to more families choosing to live together.

If you’re considering buying a multigenerational home, there are several important factors to evaluate before making a move.

Why More Families Are Choosing Multigenerational Living

Families pursue this arrangement for different reasons, but most fall into three main categories:

1. Cultural Traditions:

• In many cultures, multigenerational living is the norm rather than the exception. Living together strengthens family bonds and provides built-in support systems. For some households, it’s less about finances and more about tradition and values.

  2. Financial Considerations:

• High home prices, job transitions, student loan debt, or economic uncertainty can make shared living arrangements more practical. Pooling resources can help offset housing costs, utilities, and maintenance expenses.

  3. Health & Caregiving Needs:

• As people live longer, more families are choosing to care for aging parents at home rather than rely on assisted living facilities. Multigenerational housing allows families to stay close while providing support.
• Additionally, some families simply prefer staying connected. Adult children may remain at home longer, or families may purchase land together to build multiple homes nearby.
  
  

A Limited Supply of Purpose-Built Homes

While demand has grown, the housing supply hasn’t necessarily kept pace. Purpose-built multigenerational homes remain relatively limited in many markets.

That means buyers may need to:

• Build a custom home designed for multiple generations
• Renovate an existing home to accommodate separate living areas
• Add an accessory dwelling unit (ADU) or in-law suite
• Convert basements or finished rooms over garages

Features to Look For in a Multigenerational Home

When evaluating properties, layout matters just as much as square footage. Common priorities include:

✔ Two primary suites — ideally on the main level

✔ Ranch-style or minimal-stair floor plans

✔ Separate living areas for privacy

✔ Additional kitchenettes or wet bars

✔ Multiple parking spaces

✔ Larger lots for expansion potential

Stair-free access is often especially important for older family members. In multi-level homes, younger residents typically take upper floors, while older generations remain on the main level.

Some buyers also look for finished rooms above garages or converted basements that allow for semi-private living arrangements.

Cost Considerations:

Multigenerational homes typically cost more than traditional single-family homes due to:

• Larger square footage
• Additional bedrooms and bathrooms
• Separate living areas
• Specialized layouts

If building new, upgraded features such as dual primary suites or expanded parking can increase costs significantly. Adding an in-law suite to an existing home can also range widely depending on scope and location.

That said, shared expenses may offset higher purchase prices. Splitting mortgage payments, utilities, and maintenance costs can make larger homes more manageable.

Financing With Multiple Buyers

When more than one generation is purchasing together, financing requires careful coordination.

Important considerations include:

• Credit scores for all applicants
• Combined income documentation
• Debt-to-income ratios
• Mortgage structure

Because lenders often base qualification on the lowest credit score among applicants, adding additional borrowers can impact approval terms. In some cases, it may be better to limit the mortgage application to the strongest financial profiles.

Early conversations with a lender are critical in multigenerational purchases.

Is a Multigenerational Home a Smart Plan For You?

Living with multiple generations can offer meaningful benefits — shared responsibilities, built-in childcare, caregiving support, and stronger family bonds. But it also requires clear communication, financial transparency, and thoughtful planning.

Before purchasing, families should discuss:

• Privacy expectations
• Financial contributions
• Long-term plans
• Exit strategies

When structured carefully, multigenerational living can be both practical and rewarding.

Bottom Line

Multigenerational housing is becoming more common as families adapt to economic realities, cultural traditions, and caregiving needs. While finding the right property may require creativity and planning, the right setup can provide flexibility, financial advantages, and closer family connections.

If you’re considering this type of purchase, working with an experienced real estate professional can help you evaluate options and structure a plan that works for everyone involved.

Disclaimer: This information is for educational purposes only and is not tax advice. Real estate transactions and tax laws are complex. You should consult with a qualified tax professional and a qualified intermediary to understand how these rules apply to your specific situation.