It’s getting harder to escape family. Results from a recent Pew Research Center study indicate a sharp increase in multi-generational households in recent decades. Consider this: In 1980, an estimated 28 million Americans, or just 12.1 percent of the population, lived in multi-generational households (with at least two generations of adults, or a grandparent and at least one other generation). By 2008, that spiked to 49 million people, or 16.1 percent of the population. The 33 percent increase since 1980 represents a major trend reversal. From 1940 to 1980, that share had declined by more than half—from 24.7 percent in 1940 to 12.1 percent in 1980—due in part to the rapid growth of the nuclear-family-centered suburbs and a decline in the immigrant population.
Fast forward to the 2000s, and it seems that everything has changed. “By analyzing the U.S. Census data and conducting public opinion surveys, we were able to identify clear demographic forces that began about 30 years ago but appear to be accelerated by the recent bad economy,” says Paul Taylor, director of the social and demographic trends project for the Washington, D.C.-based Pew Research Center.
Demographic shifts driving the trend include a rise in immigrants, who are more likely than native-born Americans to live in multi-generational households; an increase in the age of first marriages; and a spike in the number of elderly who live with their children. What’s more, the tremendous amount of job losses and foreclosures linked to the Great Recession has forced many people to move back home.
But will this decrease in independent households have a negative effect on the multifamily sector as fewer homes are in demand? Not necessarily. In fact, the surge just might lead to a new niche, says Dr. Richard Green, director of the USC Lusk Center for Real Estate in Los Angeles. “We have loads of studios and one- and two-bedrooms, but we don’t have that many three-bedrooms nationally,” Green says. “Reconfiguring stock might be an opportunity going forward.”