Property developers, home builders, and mortgage lenders are working hard to adapt to the growing trend of shared properties that are accommodating several generations of families and shared rental units.
Statistics show that more families in the United States are now sharing a home, with reasons ranging from the cultural and economic, to those centered ob providing care to family members.
A Fannie Mae study in 2013 showed that families of the same generation or multiple generations, parents, grandparents, and children, in a shared home accounted for just under a quarter (21 percent) of all households in the United States.
The lowest year on record for homes shared by multiple generations of families in the United States was back in 1980.
Two homes in a single property
The statistics show a growing trend of shared homes, a shift that the property industry must adapt to.
John Burns Real Estate Consulting conducted a survey on the growing trend of shared homes. Their results show that forty-two percent of potential home buyers plan to accommodate for their adult children; and forty four percent would like their property to be able to accommodate their elderly parents/family members.
Property developers and home builders are adapting to the growing demand for shared homes by creating and adapting properties so they can accommodate several generations of the family. Separate entrances, bedroom suites with private kitchen areas and living spaces, and separated outdoor areas are becoming increasingly important tick boxes for family aimed properties. The privacy and secluded areas of the property are designed to offer a home that can accommodate several generations of a family, but still offer some separation.
The beginning of the year saw the National Association of Home Builders’ (NAHB) International Builders’ show in Las Vegas, which showcased the latest homes that have been designed to offer comfortable living accommodation for several families or help home owners that wish to earn an extra income from their property.
Element Design Build displayed a 5,000 square foot concept property that included a completely separate accommodation unit on the second floor of the property, designed to accommodate children of adult age or elderly parents/grandparents.
A TRI Pointe company, Pardee Homes, showcased another property that featured two guest suites, that include separate entrances and self contained kitchens, which could be rented on internet based home sharing markets and websites.
A survey conducted by TRI Pointe discovered that over 1 in 3 (35 percent) young adults would like the opportunity to rent out areas of their home, at least intermittently. According to Linda Mamet, the vice president of corporate marketing at TRI Pointe, the financial benefit of renting out part of their home made the prospect of buying a home a more affordable proposition.
However, potential home owners will still more than likely need a mortgage.
By analyzing the data of loan performance and household demographics, Fannie Mae demonstrated that the makeup of American households was changing, and asked whether the rules that govern mortgage lending should be adjusted.
As a result of the research Fannie Mae conducted, the HomeReady mortgage was introduced at the start of the year. The mortgage allows lenders to consider the extra income from renting or boarding to help the requester qualify. The HomeReady mortgage also permits potential buyers to put down a minimum of 3 percent and also eliminates the top barrier and credit score that is often cited as a hindrance by young potential buyers that are currently renting a property.
The vice president of capital market, underwriting, an pricing at Fannie Mae, Jonathan Lawless, claims that the HomeReady breaks from the traditions of lending by offering a groundbreaking new element to a mortgage, that supports those that wish to have an extended household.
Making strides forward by adapting to the needs of the market
The housing industry is quickly attempting to adapt to meet the needs of the market and demand for accommodating shared households, whether it is a newly designed property layout that can provide private space for renters or independent members of the family or a new type of mortgage that regards methods of income differently.
The housing industry works in the same ways as other business industries; once a product is doing well other companies will adapt their strategies to follow in the footsteps of what is successful. So we can expect plenty more of invention as the housing industry adapts to the changes of the modern day household.