The American dream of homeownership is evolving faster than ever, driven by shifting demographics and economic pressures. The powerful trend across the country isn’t just about selling a home; it’s about right-sizing and strategically redesigning life. For experienced marketing professionals, understanding this movement—from Baby Boomers downsizing to families embracing co-living setups—is essential for capturing new market share and providing high-value financial guidance.
This guide details the strategic shift to multi-generational living, the critical buy-now-refi-later market strategy, and the innovative seller and renter programs expert agents are using to optimize client outcomes.
1. Demographic Shift: The Rise of Multi-Generational Living
Multi-generational living is booming, with one in five Americans now living in a household with multiple generations. This trend is no longer purely cultural; it is a thoughtful, strategic step forward driven by inflation, rising home prices, and caregiving needs.
Strategic Downsizing for Boomers
Baby Boomers are downsizing to make life simpler and save on costs. They are cashing out of large, two-story homes where they raised their kids, often finding they no longer need the space.
- Motivation for Change: Downsizing helps save on high utility bills for large houses and addresses mobility issues (like needing less space when using a wheelchair or avoiding long walks between rooms).
- Life Events Trigger: Selling often occurs after a spouse passes away, leaving the survivor alone. The surviving parent may then choose to move in with their adult children to seek independence while still receiving support.
The Co-Living Design
Families are planning ahead by buying one house with space for everyone. The goal is to be ready if a parent or child ever needs to move in. This has spurred huge demand for specific home features:
- In-Law Suites and Dual Primaries: Homes with flexible layouts, in-law suites, and dual primary bedrooms are highly sought after.
- New Construction Terminology: Builders are designing these spaces specifically, calling them NextGen suites (or NextG).
- The Old Way: Historically, people converted the garage for an extra room—sometimes using a swamp cooler instead of AC—which was the “old redneck way” of co-living.
Practical Insight: These co-living scenarios also help younger generations (like those in their 20s and 30s) avoid the “pain” of a $3,000 to $3,500 monthly mortgage payment, especially with high rates and high values. They move in with a family member, and everyone supports everyone else.
2. Market Strategy: The Buy Now, Refinance Later Playbook
Waiting for interest rates to drop is the wrong move. When rates eventually fall, the increased competition will reduce inventory and drive prices up, screwing over the patient buyer.
Why Buying Now is the Strategic Choice
The smartest strategy in the current market is “buy now with a high rate, and refinance later”.
- Reaping the Rewards: By purchasing now, the buyer locks in the value before the market explodes. When rates drop, their home’s value goes up, and they can simply refinance to a lower rate, reaping the rewards of immediate equity gain.
- The Median Price Sensitivity: The market segment most affected by high rates is the median price and under (homes under $500k). When rates drop, the pool of buyers who can afford these properties increases, leading to fierce competition.
- The Negotiation Swing: Competition drastically alters negotiations for these median-priced homes. We currently see sales at $10,000 under list price with seller concessions. With increased competition, that swing can shift to $5,000 over list price with no concessions, a change of approximately 5% in price and terms.
Agent Value-Add: The No-Cost Refi
To remove the friction of buying now, expert agents partner with lenders who offer a no-cost refinance option. This benefit ensures the client can lower their rate later without incurring new fees or costs, making the “buy now” decision financially sound.
The Sweet Spot: The best time to buy may be during the holiday season (e.g., October/November). Inventory tends to be at an all-time high, days on market stretch past 100 days, and rates might see small cuts (e.g., locking a rate at 6.25% with a point).
3. Innovative Programs for Sellers and Renters
Expert teams deploy creative programs to address the most urgent financial needs of both sellers and renters.
Intervention for Sellers: Avoiding Default
Sellers facing hardship need proactive intervention, especially if they are falling behind on payments.
- Notice of Default (NOD) Risk: Being 90 days late on a mortgage payment triggers a Notice of Default, which adds $5,000 to $10,000 in legal fees to the principal. A Notice of Sale can follow just 30 days later.
- Agent Solution: Sellers should call their agent before they are 90 days late. Teams offer cash advances to help sellers catch up on bills, travel expenses, or other needs, ensuring they avoid default. This keeps the home out of foreclosure and allows the seller to sell traditionally, putting an extra 10% to 20% in their pocket.
The Renter-to-Owner Savings Program
An innovative new program targets renters by turning a portion of their monthly payment into a fund for homeownership.
- Program Structure: The agent sets aside 10% of the renter’s monthly rent into an account for them.
- The Financial Benefit: For a renter paying $2,000 a month, this is $200 saved monthly. Over a year, this accumulates approximately $5,000.
- Application: This money is applied toward the buyer’s closing costs or down payment assistance when they buy a house through the agency. Crucially, the renter does not have to be renting one of the agency’s property management homes to participate.
4. Managing Expectations and Skewed Stats
High-level agents must educate clients on how public statistics are often misleading.
- Days on Market (DOM): The reported average DOM is highly inaccurate because agents withdraw and relist overpriced homes to avoid the “stale” appearance. The realistic DOM for many properties is closer to 90+ days.
- Median Price: The fact that the median sales price went up (e.g., to $485k) does not mean the overall market value increased. It only indicates that a larger volume of more expensive homes sold during that specific month.
- Seller Reality Check: When a seller has unrealistic expectations (e.g., insisting a dilapidated $450k house is worth $550k), an agent must agree to list high but only to let the seller “feel the pain”. The seller must experience the anxiety of no showings or online activity to realize their price must drop to the actual market value.
Key Takeaways: What to Do Next
- Identify Multi-Generational Demand: Focus on homes with NextGen suites, in-law setups, or potential for conversion. Counsel clients on right-sizing and co-living strategy.
- Sell the Refinance Strategy: Push the buy-now-refi-later strategy, emphasizing the no-cost refi to secure the buyer the best long-term outcome.
- Deploy Value-Add Programs: Promote the Renter-to-Owner Savings Program (10% rent contribution) to convert tenants into buyers.
- Intervene on Hardship: Proactively offer cash advances and repairs upfront to sellers facing potential default, maximizing their net proceeds by avoiding iBuyers and foreclosure fees.
- Control the Narrative: Use the reality of the 90+ day DOM and the flaws in the median price statistic to manage seller expectations and justify immediate, aggressive pricing.
Frequently Asked Questions (FAQs)
Why is Multi-Generational Living becoming so common now?
The increase in multi-generational living is driven by financial and caregiving needs, including rising home prices, inflation, and the need for aging parents or adult children to co-live. It is a strategic move to simplify life and save money.
What is the advantage of the “Buy Now, Refinance Later” strategy for buyers?
By buying now at a higher rate, the buyer gains equity and locks in the price before falling rates cause competition, lower inventory, and increased home values. When rates drop, the buyer can simply refinance, often at no cost, to secure the lower payment while retaining the equity gain.
What feature should buyers look for when planning for co-living arrangements?
Buyers should look for homes designed for co-living, which include features like in-law suites, dual primary bedrooms, and dedicated new-build designs often called NextGen suites (NextG).
How does the new Renter-to-Owner Savings Program work?
The program involves the real estate agency setting aside 10% of the renter’s monthly rent into a savings account. This money accumulates over time (e.g., $5,000 in a year on a $2,000 rent) and is applied toward closing costs or a down payment when the renter buys a house through the agency.
What is the risk for sellers who fall 90 days behind on their mortgage payment?
Sellers who reach 90 days late will incur a Notice of Default (NOD), which adds significant legal fees (e.g., $5,000 to $10,000) to their loan balance. They should contact their agent before this 90-day mark to secure a cash advance or sell before foreclosure fees mount.
How accurate is the reported “Average Days on Market” statistic?
The reported Average Days on Market (DOM) is inaccurate because agents frequently withdraw and relist overpriced homes to reset the counter, making the house appear “fresh”. The realistic DOM for many properties is likely 90+ days.
Does a rising Median Sales Price mean home values are increasing?
No. A rising median sales price simply indicates that a larger volume of more expensive homes sold that month (the middle home was pricier). It does not necessarily mean that the overall market value is increasing.
