Economical Living Solutions
With the price of housing skyrocketing, being able to afford to rent an apartment or buy a single family home is outside the reach of many young people. In recent years, the Tiny Home phenomenon has swept the western world with young people embracing minimalist living. Parents have also opted to increase the value of their home and support their adult children by adding additional living space to their existing property.
Increased Living Space
Rather than renting long term, young adults are opting to invest in converting the basement or attic in their parents home or build a Tiny Home or Laneway Unit on their parent’s property. This allows them to save up for a home or have an inexpensive place to live while they continue their studies. Tiny Homes can be built on wheels or in shipping containers and depending on the needs can cost anywhere from $80,000-$200,000. Renovating a basement to include a bathroom and kitchenette, depending on the size and needs, is a more affordable option, running from $25,000 to $70,000.
Income Options
Due to their smaller size, ADUs generally consume less energy for heating, cooling, and lighting compared to larger homes, leading to lower utility bills. Since ADUs are built on the same lot as an existing home, the cost of land is effectively shared between the main house and the ADU, making it a more economical use of space and resources. ADUs can serve various purposes over time, such as housing for family members, a home office, or rental space, providing economic flexibility as your needs change.
Market Trends
Post-Pandemic, more and more young adults are remaining in their parent’s home. Although interest rates are not projected to rise, the decrease is going to be slow; only about a 2% drop over the next two years. Inflation is also at an all time high with the cost of living increasing much faster than the rise in income. Even though inflation is expected to decline in 2024, it will remain above the target range, at about 2-3%. Housing prices are not expected to drop anytime soon either, with a predicted increase in the spring of 2024.