How the Housing Shortage is Affecting Multi-Generational Families

The housing market crisis has evolved into a significant obstacle for Americans, particularly affecting multi-generational families navigating through the complexities of limited housing availability and escalating prices.

The crunch in housing supply, coupled with rising prices, has uniquely challenged multi-generational households. The proportion of multi-generational families, which had been steadily increasing even before the current housing squeeze, has been further propelled by these market conditions. Recent statistics highlight that the percentage of multi-generational households has surged from 18% in 2021 to over 25% by the beginning of 2024, underscoring the growing reliance on shared living spaces amidst the housing affordability crisis.

While mortgage rates have indeed risen, impacting overall affordability, the direct hit to multi-generational families comes more from the sheer unavailability of homes that can accommodate their unique living arrangements. With the median house price reaching $379,100 at the start of 2024, marking a 5.1% increase from the previous year, the dream of home ownership stretches even further out of reach for these extended family units.

This article delves into how the ongoing housing shortage exacerbates the challenges faced by multi-generational families, forcing them to adapt to an increasingly constrained market.

Impact of Housing Shortage on Extended Families

Compromised Living Conditions

Overcrowding and limited privacy pose considerable challenges for extended families living in tight spaces created by the housing shortage. Squeezing multiple generations into one home not only heightens health risks, including the spread of diseases and stress-induced mental health issues, but also cramps the style of personal growth and comfort.

Such close quarters can stifle children’s play and learning, as they have to learn how to play in the same small space. In their quest for identity, teenagers and young adults often find themselves on an awkward stage with family members as the audience. Meanwhile, couples face hurdles in keeping their relationship spicy, missing out on precious moments to reconnect in privacy.

Financial Burden

A glaring disparity exists between the need for affordable living spaces and their availability, especially for the country's poorest families. The National Low Income Housing Coalition (NLIHC) has shed light on this pressing issue through detailed research. Their findings reveal a troubling scenario:

• 11 million households are categorized as extremely low income, yet only 7 million affordable houses are available
• Of the 7 million units available, 3.3 million have been taken up by high-income households
• Extremely low-income households are forced to spend 50%+ of their revenue on housing, so they experience the rental cost burden disproportionately.

This imbalance in housing availability and affordability means that low-income families, especially those with additional dependents like elderly members or young adults, are disproportionately affected by the housing shortage, deepening the financial strain they face.

Limited Choices

Should you dedicate all your resources to caring for your family, or should you focus on buying a home and securing your financial freedom? It’s a classic catch-22 situation that many intergenerational families face. Many might argue that family should always come first. However, when immediate and extended family members rely on you exclusively, you’ll likely have to make some adjustments to your budget.

Current statistics from the U.S. Department of Housing and Urban Development report that nearly one-third of households spend more than 30% of their income on housing, which is considered cost-burdened. Multi-generational families need more bedrooms and space to accommodate everyone. However,  there aren't many homes out there that fit the bill in areas close to jobs, schools, or hospitals.

The Bottom Line

There’s a dire need for the government to work in tandem with real estate developers to solve the housing crisis. By embracing innovative building technologies and streamlining regulatory processes, we can tackle the root causes of this crisis and pave the way for more affordable housing. The potential for change is a long road, but with concerted effort and creative strategies, there’s a possibility for real progress.

Still, the situation is not entirely bleak. Our team at NewHomesMate, with its wealth of experience and deep understanding of the market's intricacies, is ready to guide you, from your first questions to the blue tape walk through.  Whether you're seeking affordability, location, or a specific lifestyle fit, we're here to turn the intimidating task of finding a new construction home into an achievable reality. Start your search, and let's unlock the door to your dream home together!