Be prepared! The costs of homeownership extend beyond the down payment
As a soon-to-be new homeowner, your financial focus has probably been on saving for the down payment. And now that you’ve got a stash of cash and are about to close on your loan, the question is: Should you use all of it for the down payment? Or should you put some of it aside just in case?
You may want to take some things into consideration before answering that.
Considerations for multigenerational housing
There are plenty of reasons why families choose to live in multigenerational households, which are generally defined as 3 or more generations living together. Here are some of the more typical ones:
- Housing costs and affordability – According to the National Association of Realtors® (NAR), the median sales price of an existing home in 2026 was $440,6002, which is $93,700 more than it was in 2021 ($346,900)3. That’s a 27% increase in 5 years! It goes without saying that this has created a financial challenge for buyers who haven’t seen corresponding wage increases. Sharing costs in a multigenerational household makes buying and living in a home much more affordable – even if only some of the inhabitants are actual owners of the home
- Caregiving for aging parents – Nursing homes and assisted living housing are extremely expensive, so many families decide to provide their own care for their aging loved ones
- Cost savings – 37% of first-time homebuyers have student loan debt.4 Moving in with family can allow them to stretch their budgets to pay off debt and other priorities. Plus, sharing expenses has obvious financial benefits for all family members involved
- Childcare – Having another generation care for children not only saves money, but it also allows young parents to focus on their careers knowing they have reliable and loving childcare – to say nothing of the benefit of creating stronger bonds between the generations
Multigenerational housing options
As the number of Americans living in multigenerational homes has grown, so have the types of dwellings. Besides having a family member just move into the extra bedroom of a traditional single-family home or remodeling to add an in-law suite, homes are being built specifically for multigenerational living. These custom homes are designed to offer both open-concept shared areas as well as privacy features, like separate entrances, multiple ensuite bathrooms, kitchenettes, and smaller dual-purpose rooms that can be used for reading, yoga or just being alone.
Another hot option for multigenerational living is an accessory dwelling unit (ADU), which is a small, affordable, self-contained living space situated on the property of a single-family residence. Although zoning in some areas restricts them, ADUs can be ideal for aging parents because they allow families to be close enough for caregiving while maintaining privacy and independence.
A new shared-living trend: Co-buying
Increases in home prices coupled with sticky inflation have created a new category of homebuyers: co-buyers. These types of homebuyers combat affordability challenges by pooling their resources to purchase a home with a non-romantic partner, such as a friend, sibling or other partner.
According to NAR, about 60% of renters say they would consider co-buying with friends.5 Gen Zers are the most willing to co-buy a personal residence (70%), with older generations most interested in co-buying investment properties.6
Whether COVID made the idea of living together more acceptable, or affordability challenges have made it more necessary, co-buying is a growing trend and has even led to the creation of new housing technology platforms that help co-buyers navigate the financial and legal complexities of shared ownership.
Julie Tramonte
Julie Tramonte is a writer who joined MGIC in 2018. Prior to flying the coop, she wrote for a mattress company, a manufacturer and advertising agencies. She’s obsessed with reading, traveling, tennis and rearranging furniture. Mother of 2 beautiful, adult daughters. Empty nester who recently downsized. Her guilty pleasures are doughnuts and the Kardashians (don’t tell anyone).