Conventional explanations of neighbourhood ethnic transitions consider what drives differential growth in ethnic group populations without regard to household composition. We enrich these nonhousehold approaches by using consistent Census data on neighbourhoods and households for England and Wales for 2001, 2011 and 2021 to analyse connections between mixed-ethnicity households and neighbourhood ethnic diversity. We employ a neighbourhood typology of ethnic diversity that identifies neighbourhoods as either low- or moderate-diversity, or high-diversity, where no single ethnic group is in the majority. We focus particularly on White-majority and highly diverse neighbourhoods given the dominance of the former in residential spaces in England and Wales, and because they are the principal source of transitions to highly diverse neighbourhoods. Mixed-ethnicity households have become an increasingly important feature of the ethnic diversification of England and Wales; by 2021, almost 15% of multiperson households were mixed, a growth from 12% in 2011 and 9% in 2001. We find that higher levels of neighbourhood ethnic diversity are associated with higher shares of mixed-ethnicity households. In high-diversity neighbourhoods, for example, around 30% of multiperson households (nearly a quarter of a million households) were ethnically mixed in 2021. Levels of household mixing in moderate-diversity White neighbourhoods were considerably higher than in low-diversity White neighbourhoods. The same is found for diversifying neighbourhoods. Neighbourhoods that become more ethnically diverse were typically home to higher rates of mixed-ethnicity households. Stably moderately diverse White neighbourhoods also had a higher proportion of mixed households. Studies of neighbourhood transition that focus on individuals in neighbourhoods may be missing important processes operating in the intimate spaces of the home. Including this intermediate scale of analysis adds to our understanding of neighbourhood ethnic mixing and processes of integration.