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    Back to the Future – Return of the Extended Family Household

    November 27, 2011

November 27, 2011

Back to the Future – Return of the Extended Family Household

The US housing market is still moribund.  New single family home sales were only 323,000 last year, the lowest since records began being kept by the Commerce Department.  On top of that, the Census Bureau’s American Community Survey reports that 2010 household formations, at about 981,000, were still significantly below the 2004 high of 1.48 million.   Both numbers represent troubling news for home builders.

However, according to a recent article in BusinessWeek, some builders may have found a profitable new niche in an otherwise bleak market – the multi-generational home.  These are residences that cater to families where multiple generations are living under one roof.  Pulte, the nation’s largest builder by revenue, is offering new homes with stand-alone smaller units or the option of converting garages to “casitas,” the Spanish word for small houses. Other Pulte features to accommodate extended families include ground-floor master bedrooms for elderly family members who can’t climb stairs.

multi-generational livingThe reason builders see this as a new opportunity is evident from the numbers in a recent study by the Pew Research Center, The Return of the Multi-Generational Family Household.  Multi-generational living arrangements were common up until the 1950’s, then declined.  Since the 1980’s, however, such households have grown steadily, and in 2010 it is estimated that 51 million American households (16.7% of total households) were in this category.

The economic and social factors cited in the Pew study are informative:

  • Both men and women are marrying at a later age, 28 and 26, respectively.  This is about 5 years later than in 1970.  For these 20-somethings, home may be the best living situation in a down economy where it is difficult to find a job or  launch a career.
  • Immigration also is a big factor.  First- and second-generation immigrants are the most likely to live with extended families.
  • The Great Recession, in particular, has hastened the return of  the extended family.  Adult children may need to move back in with their parents for economic reasons.
  • Older family members are moving in with their Baby Boomer children due to ill health, widowhood or financial necessity (e.g., declining health coverage due to cutbacks in Medicare programs).

These trends illustrate the shifting context in which the American dream is played out.  The extended family residence is just one more way that Americans are dealing with the Great Recession.  Whatever the economic and social fallout from this new family togetherness, the builders will happily oblige by filling our need with the latest version of the mother-in-law apartment.



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