Protagonist family confirmed to be poverty level

Hoenn is based on the Japanese region of Kyushu. The earlier games were all heavily influenced by Japanese culture. This is evident in things like the buildings and NPCs.
Given how small many houses are in Japan, especially in heavily populated areas, it's quite common for children to sleep with their parents well into their teens. And even for the grandparents to sleep in the same room as well, if they all live under the same roof.