{"id":2825,"date":"2023-03-06T10:00:00","date_gmt":"2023-03-06T15:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2825"},"modified":"2024-04-25T23:18:09","modified_gmt":"2024-04-26T03:18:09","slug":"more-people-are-buying-multi-generational-homes-why","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/more-people-are-buying-multi-generational-homes-why\/","title":{"rendered":"More People Are Buying Multi-Generational Homes. Why?"},"content":{"rendered":"\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"341\" src=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/more-people-are-buying-multi-generational-homes-1024x341.jpg\" alt=\"\" class=\"wp-image-2826\" srcset=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/more-people-are-buying-multi-generational-homes-1024x341.jpg 1024w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/more-people-are-buying-multi-generational-homes-300x100.jpg 300w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/more-people-are-buying-multi-generational-homes-768x256.jpg 768w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/more-people-are-buying-multi-generational-homes-1536x511.jpg 1536w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/more-people-are-buying-multi-generational-homes-2048x681.jpg 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Multi-generational homebuying is approaching its highest rate ever, says the National Association of REALTORS\u00ae (NAR). About 15% of U.S. buyers are opting for multi-generational living. That\u2019s up from 11% just before Covid.<\/p>\n\n\n\n<p>Why are so many homes now multi-generational?<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">These Days, for Many Hopeful Home Buyers, It\u2019s All About Affordability.<\/h2>\n\n\n\n<p>Some home buyers want to care for their parents. Some want to live with their extended families. But cost is also a major reason for the upswing in the multi-generational home. &nbsp;<\/p>\n\n\n\n<p>NAR points to a growing number of households relying on more than one income-earner to afford a down payment. This is especially so for first-timers.<\/p>\n\n\n\n<p>On average, first-time home buyers put 6% down. That\u2019s just about a third of what the average repeat buyer puts down. (Why? Because repeat buyers have already had a chance to <a href=\"https:\/\/www.deeds.com\/articles\/buying-a-house-to-save-money-its-a-tried-and-true-method\/\">save up wealth<\/a> through prior property value appreciation.)<\/p>\n\n\n\n<p>Some markets, mostly in the South and the Midwest, are even tougher nuts for first-time home buyers to crack. Large residential companies have targeted these places, and they\u2019re buying up the properties first-timers could afford if the companies weren\u2019t there.<\/p>\n\n\n\n<p>In 2022, first-time homebuyers \u2014 the very people who struggle the most with home buying \u2014 only numbered about a quarter of primary residence purchasers. It was the lowest year for first-time home deals in four decades \u2014 since NAR started keeping track. &nbsp;<\/p>\n\n\n\n<p>The fate of the frustrated would-be buyers is precisely the theme of a recent story in the <em>Atlanta Journal-Constitution.<\/em> Titled \u201cAmerican Dream For Rent,\u201d the story describes how large companies frustrate ordinary buyers.<\/p>\n\n\n\n<p>Instead of building generational wealth by owning homes, these would-be buyers are being turned into a permanent class of renters. Which is, in short, just what the companies need to grow their profits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Corporations Have Snapped Up Homes. Atlanta is \u201cGround Zero for Corporate Purchases.\u201d<\/h2>\n\n\n\n<p>\u201cMetro Atlanta,\u201d says the <em>Atlanta Journal-Constitution,<\/em> is \u201cground zero for an investor takeover of the American Dream.\u201d<\/p>\n\n\n\n<p>In this takeover, billionaire corporations buy up properties and convert them to rentals. Some operate as partners of massive developers, constructing whole subdivisions for rent. Some are snapping up homes from sellers.<\/p>\n\n\n\n<p>It\u2019s long been known that businesses buy up foreclosed properties. But some of the corporate buyers have also grabbed homes available from sellers. All told, over the past decade, corporations have acquired 65,000+ freestanding homes in greater Atlanta. They fix the homes and flip them to other companies, or convert them to rental homes. &nbsp;<\/p>\n\n\n\n<p>Invitation Homes and Progress Residential are the firms with the largest rental portfolios across the United States. In the Atlanta area, each of those two companies control more than 10,000 houses. &nbsp;<\/p>\n\n\n\n<p>From July 2021 to July 2022, major companies bought up a third \u2014 yes, a third! \u2014 of the homes on the Atlanta-area market. How did they get so many? A wealthy company can pay cash. It can promise a quick sale. Sellers like this. They like the fact that a wealthy company doesn\u2019t pose a risk of the home loan mortgage falling through before closing. They like the company\u2019s lack of interest in inspection reports. Regular buyers find it tough to compete with all that.<\/p>\n\n\n\n<p>One frustrated would-be buyer rents today from Progress Residential. She\u2019d love to buy her own home \u2014 but where?<\/p>\n\n\n\n<p>Here is how she describes her area:<\/p>\n\n\n\n<p><em>Next door is Invitation, two homes further down are Invitation and American Homes 4 Rent homes. At the end of our block is a Progress home, and then you go to the other side and it\u2019s Progress homes.<\/em><\/p>\n\n\n\n<p>Only two households in her neighborhood are owner-occupied.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Corporate Successes May Have Come at the Cost of $4 Billion in Lost Equity for Atlanta-Area Residents.<\/h2>\n\n\n\n<figure class=\"wp-block-image alignright size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"360\" height=\"240\" src=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/corporate-success-may-have-come-at-a-cost.jpg\" alt=\"\" class=\"wp-image-2827\" srcset=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/corporate-success-may-have-come-at-a-cost.jpg 360w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2023\/03\/corporate-success-may-have-come-at-a-cost-300x200.jpg 300w\" sizes=\"auto, (max-width: 360px) 100vw, 360px\" \/><\/figure>\n\n\n\n<p>They say they\u2019re creating housing opportunities. But the big companies are wrecking the buying power of many ordinary residents, in Georgia and elsewhere.<\/p>\n\n\n\n<p>Minority buyers have been the hardest hit. That\u2019s because corporate buyers tend to be active in diverse communities. And this pattern is keeping many would-be buyers struggling with the <a href=\"https:\/\/www.deeds.com\/articles\/update-on-black-real-estate-wealth-trends-in-2023\/\">racial wealth gap<\/a>.<\/p>\n\n\n\n<p>That wealth gap has intergenerational impacts. Georgia Tech researcher Brian An told the <em>Journal-Constitution <\/em>that $4 billion+ in home equity has been lost to households in greater Atlanta.<\/p>\n\n\n\n<p>The trouble for would-be first-time buyers is further complicated by the way residential companies stimulate the markets where they operate. The more corporate buying goes on in a place, the higher home prices rise in that spot, according to research carried out by the <em>Journal-Constitution<\/em> itself.<\/p>\n\n\n\n<p>And then these same companies press the cost of renting up, too. In fact, the companies promise their investors that they can press rent up and collect more fees \u2014 even while they tell reporters that they\u2019re helping to fill the nation\u2019s need for affordable housing. Invitation Homes hiked its average Atlanta-area&nbsp; 11% last year.<\/p>\n\n\n\n<p>Invitation Homes was established by the Blackstone Group. Other major financial institutions are involved in the residential rental sector, too. For example, JPMorgan Chase recently entered the market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Georgia Real Estate Law Is Not on Its Residents\u2019 Side. That\u2019s One Reason Companies Come.<\/h2>\n\n\n\n<p>The major investor-buyer firms have concentrated themselves in just a few U.S. markets. They tend to congregate where business rules give them the most leeway. Georgia is one of the states that caters to investor-owners the most.<\/p>\n\n\n\n<p>Business-friendly states like Georgia smooth out the way for residential companies and their profit growth. The <em>Journal-Constitution<\/em> found that the most massive companies are the quickest to evict their residents, raise rents, and burden people with fees. The reporters found these firms\u2019 customer service and maintenance records spotty at best.<\/p>\n\n\n\n<p><em>\u261b <\/em><strong><em>Check out the details at the source: <\/em><\/strong><a href=\"https:\/\/www.ajc.com\/american-dream\/investor-owned-houses-atlanta\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><em>American Dream For Rent: Investors Elbow Out Individual Home Buyers<\/em><\/strong><\/a><strong><em>.<\/em><\/strong><\/p>\n\n\n\n<p>Because of Georgia laws, local governments have a hard time tracking down the corporate representatives, let alone fining them. Georgia\u2019s city officials are not permitted to make the companies register their residential properties and give management\u2019s contact information.<\/p>\n\n\n\n<p>Some Georgia politicians want to bar <em>any <\/em>local regulations for single-home rentals.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">U.S. Policies Are Also Responsible for Hopeful Buyers\u2019 Frustration. Time for More Federal Action? &nbsp;<\/h2>\n\n\n\n<p>The U.S. government supported large companies that moved into failing housing markets after the crash of 2007-09. The government never stopped giving them access to cheap loans.<\/p>\n\n\n\n<p>The <em>Journal-Constitution <\/em>notes that Freddie Mac has backed loans for corporations active in the Atlanta area. It describes a loan one major company got, with an interest rate barely higher than half of what the ordinary taxpayer got on the same closing date.<\/p>\n\n\n\n<p>Last year, we noted that the White House created a new <a href=\"https:\/\/www.deeds.com\/articles\/the-biden-administrations-new-housing-supply-action-plan\/\">Housing Supply Action Plan<\/a>. Does it go far enough? You be the judge. &nbsp;<\/p>\n\n\n\n<p><strong>Supporting References<\/strong><\/p>\n\n\n\n<p class=\"has-small-font-size\">Tannistha Sinha for <em>RealTrends.com<\/em> (HW Media, LLC): <a href=\"https:\/\/www.realtrends.com\/articles\/multi-generational-homebuying-nears-an-all-time-high-nar\/\" target=\"_blank\" rel=\"noreferrer noopener\">Multi-Generational Homebuying Nears an All-Time High<\/a> (Feb. 7, 2023; citing corporate ownership data from Redfin, and also citing the most recent <em>Profile of Home Buyers and Sellers<\/em> issued by the National Association of REALTORS\u00ae).<\/p>\n\n\n\n<p class=\"has-small-font-size\">Brian Eason, John Perry,\u00a0and Michael Kanell for the<em> Atlanta Journal-Constitution<\/em>: <a href=\"https:\/\/www.ajc.com\/american-dream\/investor-owned-houses-atlanta\/\" target=\"_blank\" rel=\"noreferrer noopener\">American Dream For Rent: Investors Elbow Out Individual Home Buyers<\/a> (Feb. 9, 2023; citing a 2022 study by University of Texas at Dallas, as well as research at Georgia Tech.)<\/p>\n\n\n\n<p class=\"has-small-font-size\">And as linked. Photo credits: <a href=\"https:\/\/www.pexels.com\/photo\/a-family-having-fun-7322375\/\" target=\"_blank\" rel=\"noreferrer noopener\">Alena Darmel<\/a> and <a href=\"https:\/\/www.pexels.com\/photo\/family-having-dinner-and-celebrating-4262173\/\" target=\"_blank\" rel=\"noreferrer noopener\">August de Richelieu<\/a>, via Pexels.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Multi-generational homebuying is approaching its highest rate ever, says the National Association of REALTORS\u00ae (NAR). About 15% of U.S. buyers are opting for multi-generational living. That\u2019s up from 11% just before Covid. Why are so many homes now multi-generational?<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-2825","post","type-post","status-publish","format-standard","hentry","category-general"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>More People Are Buying Multi-Generational Homes. Why? - Deeds.com<\/title>\n<meta name=\"description\" content=\"Multi-generational homebuying is approaching its highest rate ever, says the National Association of REALTORS\u00ae (NAR). 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