Multigenerational homes for seniors: Pros, cons and why more families are choosing them

Key takeaways

• Multigenerational housing is growing rapidly, driven by rising costs and caregiving needs. The number of people living in multigenerational households quadrupled from 14.5 million in 1971 to 59.7 million in 2021, according to Pew Research Center.
• Seniors have a range of housing options at different price points, from repurposing rooms for as little as $150 to $300 in materials to building an accessory dwelling unit at $150 to $300 per square foot. Before starting any project, check local zoning laws and building permit requirements, and consult with Medicare, Medicaid, Social Security, the IRS and a legal professional about how a shared housing arrangement may affect benefit eligibility.
• A written agreement covering finances, equity, household responsibilities and major life events should be in place before any family moves in together. Without these conversations upfront, even close families risk disputes over money, parenting, privacy and household duties.

Multigenerational living is becoming a more common housing choice as families look to cut costs, accommodate adult children and care for older loved ones under one roof.

The number of people living in multigenerational housing quadrupled from 14.5 million in 1971 to 59.7 million in 2021, according to Pew Research Center.

This guide breaks down the various options for seniors seeking multigenerational housing, the costs associated with those choices as well as pros and cons that should be considered beforehand.

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The population of people 65 and older has reached 61.2 million, according to Census Bureau data. The share of people in that age group rose from 12.4% in 2004 to 18.0% in 2024.

By the end of the 2020s, one in five Americans will be 65 or older, according to AARP, the nonprofit advocacy organization for people 50 and older. That’s because Americans are living longer. In the next 10 years, the Census Bureau projects there will be more people over 65 than under 18.

Rising housing costs and overall inflation are also pushing more people to consider multigenerational housing.

In 2024, 17% of homes purchased were intended for multigenerational households, up from 11% in 2021, according to a National Association of Realtors survey.

Buyers cited several reasons for choosing the arrangement. About 36% pointed to cost savings, while 25% said they wanted to help care for aging parents. Just over 21% said adult children or other relatives had moved back home.

Before co-borrowing or co-signing the loan make sure you check with Medicare, Medicaid, Social Security, the IRS and a legal professional about how the arrangement and various deductions will affect your eligibility for benefits.

Multigenerational households are becoming the norm. According to the National Association of Home Builders, the homeownership rate of multigenerational households reached 74.2% in 2022, exceeding the 73.9% rate for other household types.

Builders have responded to growing demand by expanding their offerings of new construction multigenerational housing, according to Home Buying Institute, an education website aimed at helping consumers navigate the housing market. Major builders, including PulteGroup, KB Home and Lennar have increased production of multigenerational homes with features including two primary suites on the first floor, separate entrances, kitchenettes and separate temperature controls.

Most new construction homes in the Seattle area are designed for multigenerational living, said Veronica Morss, a broker based in Kirkland, Washington with eXp Realty. Foreign workers often bring over the members of their extended family, who provide support as the family settles into a new country, she said.

A common feature is a flex room with a ¾ bathroom on the main floor, she said. “These spaces can easily function as a bedroom for parents, long-term guests or adult children without requiring them to navigate stairs,” she said.

Building a home dedicated to multigenerational living will cost more than a traditional home, according to U.S. News and World Report real estate, an online resource for consumers. It averages $220 to $350+ per square foot, compared to $150 to $300 a square foot for a traditional home. The extra money pays for dual primary suites or a small guest wing.

Other families may opt to remodel an existing house to accommodate an elderly parent.

Keep in mind that altering a home with a remodeling project or addition may require building permits and inspections from the local government. It may also be prohibited by zoning laws that regulate the number of persons who can live in the home. A licensed contractor or consultation with local government officials can help determine your legal liability before starting work. An attorney experienced in local codes and laws can also evaluate your situation, saving you money and time on future expenses.

Homes may need modifications such as walk-in tubs or stair lifts for aging parents or people with disabilities. 

Depending on the scope of the work, you may need an architect to help design the modifications.

Priority should be given to making the home work for the family unit as well as the individuals.

“In my practice, a typical question from families is, ‘Can everyone live here without feeling like they’re on top of each other?’” said Alexei Morgado, a Miami, Florida real estate agent and founder of Lexawise, a test prep company for real estate exams.

“This typically means having a downstairs bedroom with a private bathroom for the elder parent as well as a private entrance, living area, kitchenette, or split bedroom plan to maintain their privacy.”

Peace and quiet are important considerations, said Steve Jolly, a broker at Benchmark Realty in Nashville, Tennessee. “If the grandkids are up playing early in the morning, will Grandma be woken up by every noise they make?” he said.

There are a variety of ways that a family can renovate a home to accommodate multiple generations, according to the AARP and home services marketplace Angi.

Turning a two-car garage into an apartment is a popular option. This 400- to 500-square-foot space could accommodate a primary suite and full bathroom. The average cost to convert a garage to living space is around $40 a square foot.

A basement may have the plumbing, electrical and heating, ventilation and air-conditioning system framework in place, making it a more affordable option for some families. Depending on the size of the basement, the space could accommodate a primary suite, a second bedroom, a full bathroom, a kitchenette and a living room.

If a basement is a walkout, it already has a separate entrance. The average cost to finish a basement is $15,000 to $75,000.  

Think loft living, adding a bedroom and den. It may require flooring, insulation and windows. But steep stairs may make this an unattractive option for some seniors.

An attic conversion would cost around $20,000.

Adding a room can be a simple way to create more living space for a bedroom and bathroom, especially if the home doesn’t have a basement or garage. Additions cost from $80 to $200 per square foot for building on the ground level and $300 to $500 per square foot to build up.

Low budget? Splitting a larger room into smaller ones may be a more affordable choice. It can be a do-it-yourself project that costs $150 to $300 for materials.

Families can convert an underused dining room or porch into a bedroom, while closets can make great bathrooms.

The cost to convert an existing room into a bedroom ranges from $10,000 to $90,000, according to Fixr, an online home remodeling resource. The cost of converting a closet into a half bath is $3,000 to $12,000, while a full bath runs $8,000 to $30,000, said Adnan Painting and Remodeling, a Westfield, Massachusetts contractor.

An accessory dwelling unit is a separate living unit on the same property as a home. It typically includes a kitchen, bathroom and separate entrance. They are not cheap, running $150 to $300 a square foot.

A tiny home usually is around 400 square feet or less and is often built on wheels. The cost ranges from $60,000 to $80,000.

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Combining multiple generations in a household can help homeowners in several ways.

• Mortgage payments or rent are typically lower per person when costs are shared. Other shared expenses may include utilities, food, maintenance, décor, property taxes, insurance and homeowners association fees.  
• Sharing expenses can help younger adults build savings or pay down debt. It may also give them time to improve their credit and save for a down payment. 
• Having multiple adults with income and assets can increase the chances of qualifying for a mortgage or refinance — and may allow borrowers to qualify for a larger loan.  However, lenders generally underwrite loans using the lowest credit score among applicants. Before applying, everyone's credit should be in good shape.

Additional adults in the home, particularly grandparents, can help care for young children. Grandparents may also provide stability during a divorce by offering undivided attention and support when single parents feel overwhelmed. 

As mortgage payments are made over time, equity builds. Equity is the difference between a home’s value and what is owed to the lender, and it can be accessed through refinancing or selling the home. 

Household members who contribute to mortgage payments should have a written agreement with the borrower listed on the title and mortgage. The agreement should outline how equity will be prorated when the home is sold or refinanced. It should also address major life events such as death, illness or divorce. Consult an attorney for professional advice on these issues before you start a multigenerational home.

With more people under one roof, personal space is limited. 

This adjustment can be especially difficult for grandparents or young adults accustomed to living alone. Privacy concerns can be eased by designating personal spaces and setting simple rules, such as knocking before entering bedrooms. Noise is another concern, along with potential parking shortages. Discuss these issues with the family before they move in.  

More residents mean more dishes, larger laundry loads and more frequent cleaning. House rules may require everyone to clean up after cooking or put away toys. Chores such as cleaning bathrooms, kitchens and common areas may need to be rotated. 

Even close relationships can become strained when people live together. 

Common sources of conflict include finances, parenting styles and household responsibilities. These issues should be discussed — and agreed upon — before moving in together. 

Another issue is when a living situation becomes impossible due to abuse, addiction or other problems affecting the family. It’s also possible that a family member may be unable to afford their share of the mortgage because of sickness or loss of work. Local laws vary as to the rights of family members living in a household. Consult with an attorney about possible scenarios that could arise.

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