More people in the US are considering living under the same roof as other family generations with demand for multi family property rising, according to a new survey.
Real estate buyers are scaling down due to the economic crisis and increasingly looking for properties that fit more than one generation, says the survey by Coldwell Banker Real Estate in Parsippany, New Jersey.
Some 37% of the company’s real estate agents polled said that in the past year, buyers were increasingly shopping for larger properties not because they wanted more space but because they can’t afford a home on their own.
Almost 70% of the agents said they expect economic conditions will drive still greater demand for this type of property over the next year.
‘More buyers are pooling investments, considering bringing mom and dad into it,’ said Diann Patton, a Coldwell Banker real estate consumer specialist based in Grass Valley, California.
Buyers were primarily driven by financial concerns when deciding to combine generations in a household, the survey found. Health concerns were the second most common reason and strong family bonds a distant third.
Patton said one of her clients sought to bring her mother out of a health care facility. The mother and daughter pooled resources, buying a house with separate entrances with units for each and room for a caregiver.
This shift in homeownership comes as unemployment hovers just under 10% and many consumers are being dealt wage cuts. College graduates unable to get jobs are often returning to their parents’ homes.
Merging generations under one roof could foster more demand in the struggling move-up market, with families buying together to get larger homes than the entry level houses some might otherwise be able to afford.
Buyers are also aware that current government support is due to end soon. Those eligible for a $6,500 federal tax credit aimed at move-up buyers, as well as the $8,000 first time buyer credit, need to sign contracts by April 30 and close on loans by the end of June before these programmes expire.
The US government has been compelled to spur lenders to modify mortgage terms for struggling borrowers still occupying their homes. But so far, lenders have been unable to keep pace with the number of mortgages that are failing.
On the plus side, houses are more affordable after prices toppled about 30%, on average, from 2006 peaks and with 30-year loan rates holding near record lows under 5%.