Multigenerational Homes and ADUs: A Smart Move in Today’s Market?

Today’s real estate market has many buyers looking beyond the traditional “starter home” model. With mortgage rates projected to remain above 6% on average in 2026, families are getting more strategic about how a home can meet both today’s needs and tomorrow’s opportunities. One option gaining attention is purchasing a multigenerational home or a property with space for an accessory dwelling unit, often called an ADU.[realtor]

For buyers in Massachusetts and southern New Hampshire, this can be a practical way to create flexibility, help family members, and potentially add income options over time.

What is multigenerational living?

A multigenerational home is simply a property designed, or adapted, for more than one generation of a family. It may include adult children returning home, aging parents who want to remain close to family, or relatives combining resources to purchase a larger property together.

The right home does not have to feel crowded. Many successful multigenerational setups include a first-floor bedroom and bath, a finished lower level with a separate entrance, an in-law suite, or an attached apartment. The goal is to balance connection with privacy.

For many families, buying together can make a better home attainable than either household could comfortably purchase alone. It may also reduce the need for separate housing, childcare, or assisted-living arrangements.

Why this strategy matters in today’s market

Affordability remains a major consideration for buyers, even as market conditions become more balanced than they were a few years ago. Realtor.com forecasts an average mortgage rate of about 6.3% for 2026, which makes monthly payment planning especially important.[realtor]

That is why flexibility has become so valuable. A home that can accommodate family today and serve another purpose later may offer more long-term value than a property with a layout that only works for one stage of life.

A multigenerational purchase can offer:

• Shared buying power: Two households may be able to combine resources for a larger or better-located property.
• Support for aging parents: Family members can stay nearby while maintaining more independence than a traditional shared-bedroom arrangement allows.
• Room for adult children: A separate suite can provide space while they save, start careers, or navigate a life transition.
• Future rental potential: Depending on the property, local rules, and financing, a separate living area could become a long-term rental option later.
• Resale flexibility: Homes with a first-floor suite, separate entrance, or finished lower level may appeal to a broader range of future buyers.

Understanding ADUs and “secondary dwelling units”

Many people use the term “secondary dwelling unit” or SDU to describe what Massachusetts formally calls an accessory dwelling unit (ADU). An ADU is a smaller, independent residential unit on the same lot as a primary home. It can be a basement conversion, a garage conversion, an addition, an attached apartment, or a detached backyard cottage.

Massachusetts has made ADUs more accessible through statewide rules that allow qualifying ADUs by right, although important local requirements still apply. The state notes that ADUs can be interior, attached, or detached, and that homeowners must still confirm local building, health, utility, and permitting requirements before moving forward.[mass]

That means an ADU opportunity should never be assumed based on a listing description alone. Before making an offer or planning construction, buyers should verify:

1. Zoning and local bylaws
2. Lot size, setbacks, and parking rules
3. Septic capacity or public sewer requirements
4. Building-code and fire-safety standards
5. Whether owner occupancy is required
6. Whether the intended use can be rented, and under what conditions

What to look for when buying

If multigenerational living or an ADU is part of your plan, it is important to shop differently. A property may have enough square footage but still lack the layout, access, utilities, or zoning potential to make the idea work.

Prioritize homes with:

• A first-floor bedroom and full bath
• A walkout basement or separate exterior entrance
• Existing plumbing or space for a second kitchen
• A garage, barn, or outbuilding with possible conversion potential
• Adequate lot area and parking
• A flexible floor plan with privacy between living spaces
• Utility and septic capacity that can support the planned use

For example, a home with a finished walkout lower level may be ideal for an aging parent or adult child. A property with a detached garage and sufficient land may be a stronger candidate for a future ADU, subject to local approvals and construction feasibility.

The financial conversation buyers should have first

A multigenerational purchase can be a powerful strategy, but it should begin with clear expectations. Families should discuss who is contributing to the down payment, how monthly expenses will be divided, who will be on the mortgage and deed, and what happens if one household wants to move or can no longer contribute.

Before making an offer, speak with a knowledgeable lender about financing options and have an attorney explain ownership structures. A clear agreement can protect relationships just as much as it protects the investment.

It is also important to separate a property’s current value from its possible future value. Do not overpay based solely on the assumption that an ADU or in-law suite will be easy to add. Construction costs, permits, septic work, utility upgrades, and local regulations all affect the final numbers.

The bottom line

In a market where buyers are seeking more value from every square foot, multigenerational homes and ADU-ready properties deserve a closer look. They can create room for family, provide greater financial flexibility, and help a home adapt as life changes.

The best opportunity is not simply the biggest house. It is the property that fits your family’s needs now, has a realistic path for future use, and makes financial sense from the start.

If you are considering a multigenerational purchase or want help identifying properties with ADU potential in Massachusetts or southern New Hampshire, I can help you evaluate the home, the layout, and the practical questions before you commit.