More families move in together during housing crisis

Love isn't all that's keeping family together today. The bruising housing market is, too.

Last year, Kanessa Tixe's dad had just finished building a three-family house when he lost his superintendent job in February. He wasn't sure how to make the $5,000-a-month mortgage on the new house in Queens, N.Y.

So Tixe and her siblings decided to help out in an unusual way: They moved in. In December, her father moved into the first floor; her stepsister and husband moved into the second floor; and her stepbrother and Tixe took the third floor. The entire family has become roommates, banding together to pay rent and help their dad with the mortgage until he finds long-term tenants.

"We're still living there now. Times are rough," says Tixe, 26, a publicist. "It's been very beneficial that we're all together. My stepbrother and I have a wonderful relationship now. We eat together for dinner, and I've become closer to my dad, too. This is an important time for family to help, the way the housing market is going. Our story is a testament to how families should come together to help with a mortgage."

The weak economy — which has brought surging foreclosures, sinking property values, vanishing home equity and mounting job losses — is playing a major role in family dynamics, pulling relatives under the same roof to pool their resources and aid relatives who've lost their homes.

Siblings are moving in with one another to help pay the mortgage. Adult children who've lost homes to foreclosure are moving back home with Mom and Dad. Even spouses in the throes of divorce are putting off separating, living together in awkward cold wars because they can't sell their houses.

That's in large part because those losing homes often have nowhere else to go. Many live paycheck to paycheck: Nearly 61% of local and state homeless coalitions are seeing an increase in homelessness since the foreclosure crisis began in 2007, according to an April 2008 study by the National Coalition for the Homeless. Only 5% said they hadn't seen an increase. The survey found that more than 76% of homeowners and renters who must move because of foreclosures are staying with family and friends.

Many are affected. Foreclosure filings surpassed 3 million in 2008, according to a recent report by RealtyTrac. The report also shows that one in 54 homes received at least one foreclosure filing during the year.

"If you have someone you love, and they're in need, and they come to you and say, 'Can I stay with you awhile?" — of course, you'll say, 'Yes.' But there are risks," says Debra Yergen, author of Creating Job Security Resource Guide. "Maybe they have pets, maybe they go out to eat, and that causes friction. There are all kinds of family dynamics. That's not to say it's not worth it, but you have to think it through so that no one feels taken advantage of."

All ages losing homes

More families are living with relatives, based on the most recent statistics available. Nearly 3.5 million brothers or sisters are living in a sibling's house, according to 2007 Census Data, up from 3 million in 2000. And 3.6 million parents live with their adult children, up from 2.3 million. About 6.7 million householders live with other relatives, such as aunts or cousins, compared with 4.8 million in 2000. That year, the housing market was beginning its boom stretch, which lasted until late 2005.

Some demographic groups are feeling the effects more than others, including younger first-time home buyers who purchased during the housing boom and older Americans hit by job losses and foreclosures who have less time to recover their financial footing. For example:

•Seniors. Older Americans who are losing their homes often lack the financial resources to buy another property. At the same time, adult children who had been helping pay for assisted living or other living arrangements for elderly parents are opting to bring their parents into their own homes because they can no longer afford the costs.

"With the financial crunch, many adult children caregivers are having to bring Mom and Dad into their own home instead of the many other options," says Barbara McVicker, author of Stuck in the Middle: Shared Stories and Tips for Caregiving Your Elderly Parents. "Money is driving most of the decisions."

Homeowners 50 and older have been significantly affected by the mortgage crisis, according to a 2008 analysis by the AARP. More than 684,000 homeowners 50 and over were delinquent, were in foreclosure, or lost their homes during the six months ended December 2007.

And some family members say they're living with a senior parent because they can't afford a home on their own.

•Young adults. Younger buyers made up a large share of those who bought property during the housing boom. About 40% of home buyers in 2004-05 were first-time buyers, according to the National Association of Realtors.

These buyers are also most likely now to owe more on their homes than they are worth, according to a Moody's report on so-called underwater mortgages. Because they are unable to sell their homes, many are trapped in mortgages they can't afford — either because of adjustable-rate mortgages resetting to higher payments or because of recent job losses. So when foreclosures loom, these younger buyers can't just sell to get out of a bind. Instead, a larger number are going through the foreclosure and then moving back in with their parents.

"Many first-time home buyers bought homes they really couldn't afford using some of the riskier loan products (adjustable-rate loans with low teaser rates and 100% financing)," says Rick Sharga, senior vice president of RealtyTrac, in an e-mail. "These homes … were still very much overpriced, and the combination of increased mortgage payments and depreciating home values has hit this group of buyers exceptionally hard."

And it's not just twentysomethings anymore: Even middle-age people are moving back in with their parents after a foreclosure.

Colt Phipps, 40, of Scottsdale, Ariz., worked in the mortgage industry until his business failed because of the housing crisis. His home, which was worth nearly $1 million, was foreclosed upon. So Phipps and his fiancée moved in with his parents, going from their 5,000-square-foot house to a 1,400-square-foot house. He also brought his two Shar-Pei dogs along and does what he can to pay rent to help his parents with the mortgage. He is still looking for work, and his fiancée, formerly a loan processor, is now working at Home Depot.

"It's actually brought us closer together," Phipps says. "It's close quarters, but we have weekly meetings to discuss things like budget. We help out with what we can. You learn about what's important, what's really valuable. Things are not real value. It's family and the people you're around."

•Divorcing couples. While hard times can often strain marriages, the housing downturn may be curbing divorces. The American Academy of Matrimonial Lawyers also says it's seeing divorce rates fall.

Overall, 37% of members said they see a decrease in divorce cases, according to a November report. Members responded that they typically see a drop in the number of divorce cases during national economic downturns, while only 19% cited an increase during these challenging times.

That's partly because couples used to be able to divorce and easily sell their homes. But with home sales so anemic, couples are reluctantly staying together until the housing market turns around.

"It takes months and months to sell a home. … They can't afford another residence," says Michael Gora, a divorce lawyer in Boca Raton, Fla. "I've had consultations where people even back off of divorce because they realize the desperate financial straits they're in."

The housing market is drawing some families together, but challenges include lifestyle differences, generational differences, depression, money squabbles and other issues when relatives huddle together for economic relief, says Nicholas Aretakis, a career coach and author of No More Ramen: The 20-Something's Real World Survival Guide.

Moving in with relatives can be "demoralizing, humbling, dehumanizing — but a lot of people don't have a lot of choice," Aretakis says.

"You lose that sense of independence, privacy and self-esteem," he says. "You lose somewhat of your identity."

FULL HOUSE? Has the recession affected the number of heads in your household? Who's moved/moving in to help pool resources?