Brian Stoffel My wife and I got a notice from our management company this week; rent will be going up 10% next year. We live fairly well below our means, so it wasn't disastrous news, but any notice of such things always sends me down a mental rabbit hole. It usually ends with me getting irrationally worried about our family's finances.

At the peak of my worries, I thought back to my friend Gabriel, who helps run his family's organic coffee farm in Costa Rica. We are about the same age, and got married within weeks of each other. But his life seems far more laid-back and less fraught with financial uncertainty.

There's one key difference between my situation and Gabriel's: He lives with family, and though my wife and I recently moved back to the Midwest to be closer to ours, my parents are still 100 miles away. That led me to ponder: Would many of our financial anxieties disappear if we adopted a similar practice in America?

The short answer: Maybe. But the statistics below show that the phenomenon of multigenerational houses is making a strong rebound in America, and some of the benefits defy our common misconceptions of the living situation.

Is This Really a Phenomenon?

If you take a step back, it's actually not living in multigenerational houses that is the phenomenon. It was only in the years immediately following World War II that the now well-worn path of high school to college to independence and gainful employment really took hold. Even today, outside of the United States and parts of Western Europe, multigenerational households are the norm.

Nevertheless, the percentage of middle-aged adults living with their parents and children has been growing steadily in the United States since bottoming out in the late 1970s.
Multigenerational housing
Though the living situation has gotten considerably more attention since the Great Recession forced many families to join together under the same roof, the trend was solidly in place long before the housing crisis hit its peak.

When one stops to think about the economic benefits that combining forces can have, you could be forgiven for wondering why we ever stopped the practice. Not only does living with grandparents -- many of whom own their houses outright -- allow for working adults to save more money for future expenses (like college), but it also provides a built-in network to help raise and look after children. With the cost of child care where it is right now (roughly $1,500 per month in Chicago, for example), those benefits are no small matter.

The vast majority -- 83% -- of young adults who have moved back home for financial reasons say that the arrangement has led them to believe that they will soon be able to independently meet their economic needs.

Beyond Economics

But as many families are finding out, the arrangement is surprising both grandparents and their middle-aged children for how well it can work once ground rules have been set and there's been an adjustment period. As Dr. Georgia Witkin, a senior editor for Grandparents.com, notes, "Many grandparents tell us not only that they love having their family back under their roof; they also love being needed again. They say it brings purpose to their days, and meaning to their lives."

Witkin is not alone in her findings. The Pew Research Center recently found that in only 25% of the cases of multigenerational households did the relationships between family members deteriorate.
Multigenerational housing
But if we remember that this shift was occurring long before the onset of the Great Recession, we can see that those who moved back in with parents for non-economic reasons are almost unanimous in their verdict of the move: A full 50% of adults say it improved familial relations, with only 8% saying it was detrimental.

Could This Really Work?

Of course, the situation isn't always ideal. If there isn't enough physical space, or if your values differ substantially from those of other family members, multigenerational living could be a recipe for disaster.

But it's hard to hear the words of Margaret Mead without thinking that she was onto something when she said: "Nobody has ever before asked the nuclear family to live all by itself in a box the way we do. With no relatives, no support, we've put it in an impossible situation."

It could be that light shown on the benefits of families living together will end up being the lasting, unexpected gift the Great Recession offered up to Americans.



You can follow Motley Fool contributor Brian Stoffel on Twitter, where he goes by TMFStoffel.

Increase your money and finance knowledge from home

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

How much house can I afford

Home buying 101, evaluating one of your most important financial decisions.

View Course »

Add a Comment

*0 / 3000 Character Maximum

34 Comments

Filter by:
stevesheff

One of the problems with multi-generational living is the tension it can create between different generations. For example, a grandparent might reproach their adult child in front of the grandchildren thereby undermining the parent''s authority. Similarly, a grandparent might take it upon themselves to punish a child without consulting the child's parents.

And then you come to the sharing of household expenses ...

July 11 2012 at 1:04 PM Report abuse rate up rate down Reply
1 reply to stevesheff's comment
Ken

The McMansions will have to be used for mult-generational living, since they have the room, and their home values have dropped in half!! Meanwhile, the cost of renting has increased a lot for apartments!...

July 11 2012 at 9:58 PM Report abuse rate up rate down Reply
derekhr84

dear mr. bernanke,

now that you have the entire world suckered into riskier assets...starving for ROI or yield...what do you have planned for an encore? moron.

July 10 2012 at 3:44 PM Report abuse +1 rate up rate down Reply
n5monthsocrapleft

THE TYPICAL OBAMY SUPPORTER IS OBESE ,DRUG ADDICT,UNWED MOTHERS OF 5 BY 4 DIFFERENT FATHERS THAT COLLECTS ,WELFARE ,SECTION 8 ,FOOD STAMPS ,WHILE SHE RAISES THE NEXT GENERATION OF INMATES. ! !

July 09 2012 at 4:07 PM Report abuse -5 rate up rate down Reply
ilm9p

The welfare scum do this nonsense everywhere. Welfare trash (code words “Single Mother”) begets multiple welfare chaps (from multiple fathers) who begets welfare grand chaps (usually as early as 13, also from multiple fathers) and so on and so forth. Food Stamps rules allow them all to claim a separate household from each other to maximize cash assistance. Plus free housing, free utilities, free cable TV, free everything!

July 09 2012 at 2:51 PM Report abuse -6 rate up rate down Reply
2 replies to ilm9p's comment
whackjobtwo

YOU WOULD'NT HAPPEN TO BE ONE OF THOSE 1% SNOBS WHO'S COLLECTING FREE CORPORATE WELFARE?

July 09 2012 at 3:37 PM Report abuse +4 rate up rate down Reply
n5monthsocrapleft

TELL THE MUSLIM CLOWN TO "CUT WELFARE" NOT "MEDICARE" N WHERES THE $500 BILLION HE STOLE OUT OF MEDICARE N TO PUT IT BACK OR THE FEDS WILL BUST INTO THE WHITE HOUSE N LOCK HIS DUMB ARSE UP. !

July 09 2012 at 3:58 PM Report abuse -2 rate up rate down Reply
fuddhouz

This reminds me of the Saturday Night Sketch where Dan Ackroyd as Jimmy Carter tells us "to think of inflation as our friend. We'll all be millionaires, we'll all be driving $50,000 cars and living in half-million dollar homes". Why stop here? Health care will improve because loving care from relatives is more effective than hospitals and doctors. There'll be no need for day care or senior care...these will be provided much more cost-effectively by each family. Less cars and houses mean less energy usage and a cleaner environment. This author probably considersd war, pandemics, and genocide as "unexpected gifts". After all, they control the surplus population.

July 09 2012 at 1:36 PM Report abuse -3 rate up rate down Reply
Sonny

That is where we are being herded whether we like it or not. Taxes are going up and govt entitlements like Social Security are going down. The govt says who will win and who will lose. If you work for the govt, you will be paid much better than if you work somewhere else (not fair), until the money runs out. If the financial system goes down, there will be a reset. It will be rough for awhile, but it might be the best way to get the govt out of our lives and take money out of the govt's pockets. Watch Europe, it will be a preview of what may happen here.

July 09 2012 at 1:03 PM Report abuse rate up rate down Reply
1 reply to Sonny's comment
Ken

Watch Great Britain as what could happen here...government cutbacks will increase unemployment like in Great Britain

July 11 2012 at 9:52 PM Report abuse +1 rate up rate down Reply
CHARITY

the daughters has a baby the boyfriend has no manners leaves the toilet seat up stomps his feet when he walks stays up all night on video games works part time doesn't help with our bills were struggling an some d aol wrighter says ohh it a good thing were all struggling with this obama economic disaster must be nice to get paid to Lie! im ready to puke cant take another 5 months no less another 4years guess im gona have to be forgiven to steal why is it all liers prosper is it an evil god!

July 09 2012 at 1:00 PM Report abuse rate up rate down Reply
ddstan1120

This iis pure bull.
I am 70 yrs young, and I really enjoy visits from my kids once in a while, but to move back into my home. NEVER.
I recall the day I enlisted in the USAF: My mom started crying and my father ran into my room and packed my suitcase. LOL

July 09 2012 at 12:58 PM Report abuse +1 rate up rate down Reply
Ed

I love my folks and all, but I'd rather gouge my own eyes out with a dull fork than ever live with them again. Seriously, dude, don't do it! Get a second job, move somewhere cheaper, be more frugal, get yourself a carboard box and put it over a subway vent. Anything but move back in with Frank and Estelle Costanza!

July 09 2012 at 12:53 PM Report abuse rate up rate down Reply
Joey

Won't be long till sharing toilet paper is the "in" thing to do. Give me a break.

July 09 2012 at 12:45 PM Report abuse +1 rate up rate down Reply