There is no question that families and households are increasingly finding multigenerational living an appealing option. In fact, numerous statistics uphold that multigenerational housing is an escalating trend being driven by financial considerations and the desire for closer family ties. In fact, the number of multigenerational households surged to an all-time high of 17% last year, according to a “Home Buyers and Sellers Generational Trends Report ” by the National Association of REALTORS (NAR). This primarily motivated by the need for cost savings, with families combining incomes to afford home ownership. Another recent NAR report revealed that, nearly one-fifth (19%) of Gen Xers and 16% of Younger Boomers purchased multigenerational homes in 2024, further exemplifying shifting residential living mindsets in the modern economy.
Beyond generating rental income or serving as an infrequently used guest house, today’s ADU marketplace offers a practical solution for housing family members of all ages. Whether accommodating aging parents, adult children, or relatives, Accessory Dwelling Units (ADUs) can provide a comfortable and independent living space while maintaining proximity to the main residence. This arrangement promotes multigenerational living and strengthens family bonds by allowing loved ones to live nearby while preserving privacy and autonomy.
ADUs can also serve as transitional housing for family members during life changes such as downsizing, job relocation, or divorce. Instead of facing the challenges of finding suitable housing in a competitive market, family members can reside in the ADU temporarily or long-term, providing stability and support during times of transition. For instance, multigenerational housing might look like a basement ADU for grandparents, where they have their own, separate entrance and living quarters. It might come in the form of a detached ADU in the backyard to house adult children. ADUs offer so many ways to maximize the benefits of multigenerational housing.
Below are 10 top reasons homeowners are opting to increase residential living space through an ADU addition for the purpose of multi-generational living.
1. Post-Plandemic Proximity: Especially after the tragedies witnessed at retirement communities in the wake of the COVID pandemic, more and more families prefer to have their aging family members living near them rather than in a senior housing community. To that end, families are adding separate space for their aging parents by converting their garage into a living unit, attaching an ADU to their home, or building a detached ADU in their backyard.
2. Caring for Elderly Parents: As more families decide to take in mom and dad when they’re too frail to live alone, they also end up with challenges of caring for their elderly parents. Families who have the resources often hire outside caregivers to help with this care and support. Sometimes a live-in caregiver is a good option because it provides this support person free housing (and even food) as partial payment for their labor. A great option for such a caregiver is a separate unit on the property such as an ADU. According to Generations United, 79% of multigenerational home dwellers say living together makes it easier to meet the care needs of at least one family member.
3. Space Shifting: Some senior retirees have decided that their current ‘family sized’ home is too large for them. So, they decide to build themselves an ADU in their own backyard that suits their needs better. Something between 800 to 1200 square feet with 2 to 3 bedrooms and 1 to 2 baths, usually in one story, becomes the perfect fit for retirees. They then allow their younger family members like sons and daughters or nieces and nephews to come live in their main home on the property.
4. Retirement Income Strategy: Another unique twist on the above scenario comes out of the fact that many seniors and retirees have already paid off their mortgage and therefore have very few property costs (only taxes, insurance and maintenance). So, again, they build themselves an ADU in their backyard, fence it off from the original main home, and rent out the large home to a tenant. This rental payment provides them the income they need in retirement.
5. Affordable Housing: With the cost of purchasing a property at an all-time high, Millennial and Gen Z families are being priced out of the real estate market and unable to purchase their own home, even as their family grows. We’ve seen a trend wherein the parents of this generation, those that already have a home, choose to build an ADU in their backyard to house their adult children and their young family. They see this as a great way to create to add value to their property while also providing a comfortable home for their adult children (and see their grandkids often).
6. Post-College Living: ADUs are also being built by some families to house ‘young adult’ children who are coming back to live at home after college. Many recent graduates choose to come back to live with mom and dad after college in order to save money without paying rent. These ADU spaces allow young adults to live at home but also have their own living space for independence.
7. Childcare and Shared Parenting Support: Multigenerational living provides a built-in support system for raising children. Grandparents can help with childcare, school pickups, or extracurricular activities, reducing the need for external childcare services and fostering strong family bonds. This arrangement also allows parents to focus on their careers or other responsibilities, knowing their children are in trusted hands.
8. Empty Nester Downsizing: When two generations of family both have their own home, it might make sense for the older empty nester parents to sell their home, and build an ADU in their children’s home back yard. The families see this as a way to keep the family close together, and also gain more financial stability and resources by cashing out of the parent’s home, which often has plenty of equity.
9. Cultural Tradition: Some cultures prefer to have multiple generations living under one roof and believe that aging relatives should live with their adult children. Often, with three generations “under one roof”, things can get tight. The ability to build a second (or even) a third living unit on a single property allows the whole extended family to live together while everyone also has their own independent space.
10. Co-Ownership Solutions: And the last one might not exactly be traditional multigenerational living, but its an interesting trend we’re seeing. Again, because of the high costs of housing, younger individuals, couples and families struggle to afford the purchase of a home. In some cases, two young families combine their resources to purchase a property together and build an ADU, which allows both to live on the property in their own individual homes.
As of 1980, only 12% of American adults lived in a multigenerational home. Today, those numbers are far higher…and understandably so. ADUs allow families to accommodate aging parents, adult children and other relatives while maintaining privacy and independence. With skyrocketing housing prices and often limited, or unsuitable, inventory, ADUs provide a more affordable multigenerational housing option—one that can proffer an additional income stream to help offset mortgage payments or contribute to savings. Multigenerational living is a great option for those seeking to take a litany of uncertainties out of the familial living and financial equation.
By Paul Dashevski
Sources:
www.nar.realtor/sites/default/files/documents/2024-home-buyers-and-sellers-generational-trends-04-03-2024.pdf
https://www.nar.realtor/blogs/economists-outlook/home-for-the-holidays-the-rise-of-multi-generational-home-buying
https://www.gu.org/app/uploads/2021/04/21-MG-Family-Report-WEB.pdf
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