Squirrels love to be snuggly. They don't usually create open nests such as with birds, but more of a "cave" like home. If they can't find a hole already in a tree or one they could "renovate" then they will simply build their own nest from twigs, leaves and lots of soft materials for the babies to keep warm.
Squirrels are very smart and are also opportunists. So make sure you don't have any easy ways into your attic or sheds, and they will continue with their natural habitats which are the trees.
But if you would like to help them out, you can get squirrel houses. These are basically oversized boxes with a hole in the side or front for them to enter. They will build it up with soft materials for their babies and to protect them.
It can be fun to watch the babies when it is time for them to venture into the new world. If you have a squirrel feeder nearby, chances are you will be able to attract them if you like the idea of them living in your yard.
Squirrel House with Nesting Box - Your backyard squirrels are going to love this well built condo. The front is hinged for cleanout if you wish, and is ready to hang. The hole is large enough for them and the inside is cozy and will keep the elements out.
Squirrel Condo - Another style of a squirrel house that will make them very happy. This one is made in the USA and will last a very long time.
It can be fun attracting wildlife to your yard, especially birds and squirrels and even cute little chipmunks. This is a very simple nesting box, that sometimes larger birds will use if they get to it first!
I remember as a kid, my dad building a covered bird house for larger birds, and a squirrel decided it looked like a great piece of real estate. It chewed the entry hole a bit larger and filled it with nesting material. Even my dad who was a "die hard squirrel repeller". had a soft heart when he realized that mom was building a nest.
Once they were born, and mom was away, my dad put a ladder to the nest, and us kids all had a chance to see three tiny sleeping babies. We didn't touch them, we just quickly looked. I have loved them ever since.
But fast forward to present times, and you don't have to use a ladder to check them out. You can watch with amazement the activities inside of these nests with hidden tiny cameras. You can watch it on your TV and you will find it just as exciting as the latest movie online.
Below is a beautiful video of squirrel babies in a natural twig and leave nest built in a tree. I found this video on Youtube and thought you would enjoy it as I did.