The Financial Case for Multigenerational Living in Montgomery County’s Luxury Market

Why affluent families are choosing to pool resources—and the surprising ROI of living together

When discussing luxury multigenerational properties in Montgomery County priced at seven figures or higher, a common reaction is puzzlement:

“If they can afford that, why do they need to live together?”

This question misses what’s actually driving the trend. In affluent markets like Montgomery County, families are not choosing multigenerational living out of necessity—they’re choosing it because the financial analysis is compelling. For households accustomed to optimizing wealth, this model often produces a stronger long-term return than maintaining separate residences.

The Montgomery County Context

Montgomery County is one of the wealthiest counties in the United States, with a median household income of $128,733 and nearly 30% of households earning $200,000+ annually. It’s a market defined by:

• 53.4% married-couple households

• 35.7% of households with children under 18

• Exceptionally high educational attainment

• A workforce dominated by professional and executive roles

• Frequent $1M+ home values in neighborhoods such as Potomac, Bethesda, Chevy Chase, and parts of Rockville

These are households led by physicians, attorneys, federal executives, technologists, and business owners—families with income, assets, and options. So why are more of them choosing to live together?

Because the numbers work.

The Traditional Model: Separate Households

Scenario

A Montgomery County family supporting aging parents.

Family profile

• Adult children (ages 45–55): household income $350,000

• Parents (ages 75–82): Social Security + retirement income $6,000/month

• Two school-aged children

Option 1: Parents in Assisted Living

• Assisted living: $4,500–$7,000/month
  (~$54,000–$84,000/year)

• Adult children’s housing costs:
  $4,500 mortgage + $1,200 taxes = $5,700/month
  (~$68,400/year)

Total annual housing cost:
$122,400–$152,400

This excludes transportation, lost equity from selling the parents’ home, and the emotional cost of separation.

Option 2: Parents in a Separate Nearby Home

• Parents’ housing: $3,000–$4,500/month
  (~$36,000–$54,000/year)

• Adult children’s housing: $68,400/year

• Home care as needs increase:
  $25–$35/hour × 20 hrs/week = $26,000–$36,400/year

Total annual housing cost:
$130,400–$158,800

The Multigenerational Model

Option 3: One Purpose-Built Multigenerational Home

Property

• Purchase price: $2.2 million

• Down payment (20%): $440,000

• Mortgage: $1.76M @ 6.5% ≈ $11,122/month

• Property taxes: $1,600/month

Total monthly housing cost: $12,722
Annual housing cost: $152,664

Contribution structure

• Adult children: $9,000/month

• Parents: $3,722/month

On paper, this looks similar to assisted living. The difference is what you get in return.

The Hidden ROI: What the Spreadsheet Reveals

1. Equity Building vs. Pure Expense

Traditional model

• Assisted living: ~$70,000/year → zero equity

• Two households → fragmented wealth building

Multigenerational model

• Annual housing spend builds equity in a $2.2M appreciating asset

• 3% appreciation ≈ $66,000/year

• Mortgage principal reduction ≈ $48,000/year

Annual wealth creation: ~$114,000

Over 10 years, that’s ~$1.14 million in additional net worth compared with assisted living.

2. Childcare Savings

Montgomery County childcare costs are among the highest in the country.

• Average full-time childcare: $33,317/year per child

• Infant care: $2,400–$2,800/month

With grandparents in the home:

• Two children × ~$2,000/month = $4,000/month saved

• $48,000/year

• $240,000 over five years

3. Elder-Care Cost Avoidance

Traditional trajectory

• Home health aides: $39,000–$54,600/year

• Memory care: $72,000–$102,000/year

Multigenerational living

• Family provides primary support

• Supplemental professional care only: $10,000–$20,000/year

Annual savings: $29,000–$82,000, depending on needs

4. The 10-Year Financial Impact

Why 2026 Is a Strategic Window in Montgomery County

Market Conditions

• More inventory and layout variety

• Price stabilization after rapid appreciation

• Mortgage rates easing from 7%+ peaks

• Reduced investor competition

Legislative Tailwinds

Maryland House Bill 1466 – Accessory Dwelling Units Act
(Effective October 1, 2025)

• Legalizes ADUs on single-family lots

• Allows detached units up to 75% of the primary home

• Requires Montgomery County compliance by October 1, 2026

• Expands true multigenerational housing options

When the Numbers Don’t Work

Multigenerational living isn’t universally optimal. It may not make sense if:

• Parents require 24/7 medical supervision

• Family dynamics are strained

• Careers demand frequent relocation

• Parents prefer full independence and have significant standalone assets

The strongest financial case appears when:

• Parents are in their 70s–early 80s

• Children are young (maximizing childcare value)

• Adult children are in peak earning years (45–60)

• Family relationships are healthy and collaborative

Beyond the Spreadsheet

Families consistently report returns that don’t appear on a balance sheet:

• Deeper grandparent–grandchild bonds

• Aging parents maintaining purpose and dignity

• Shared memories across generations

Research confirms that multigenerational households reduce financial strain through pooled resources and offer meaningful protection against long-term economic risk.

For affluent families in Montgomery County, multigenerational living is not a compromise. It’s a strategic optimization—financially sound, emotionally rich, and increasingly aligned with how wealth-conscious families plan for longevity.

Sources & Citations

• U.S. Census Bureau, American Community Survey (ACS), Montgomery County income & household data

• Child Care Aware of America, The US & the High Cost of Child Care

• Maryland General Assembly, HB 1466 – Accessory Dwelling Units Act (2025)

• Pew Research Center, Multigenerational Living in the U.S.

• Genworth Financial, Cost of Care Survey (assisted living, home health, memory care)

Traci Johnson specializes in multigenerational real estate across the DC metro area, helping affluent families in Montgomery County, Northern Virginia, and Prince George’s County identify homes designed for longevity—where independence and togetherness coexist by design.