Millennials Seek Smaller, More Energy-Efficient Homes
As Millennials begin to enter the home buying market in larger numbers, homes will get a little smaller, laundry rooms will be essential, and home technology will become increasingly prevalent, according to panelists at an International Builders’ Show press conference discussing home trends and Millennials’ home preferences. NAHB Assistant Vice President of Research Rose Quint predicted that the growing numbers of first-time buyers will drive down home sizes in 2015. Some 3 million new jobs were created in 2014, 700,000 more than the previous year “and the most since 1999,” Quint said. At the same time, regulators have reduced down payment requirements for first-time buyers from 5% to 3%, and home prices have seen only moderate growth.
“All these events lead me to believe that more people will come into the market, and as younger, first-time buyers, they will demand smaller, more affordable homes,” Quint said. “Builders will build whatever demand calls out for.”
Quint also revealed the results of two surveys: one asking home builders what features they are most likely to include in a typical new home this year, and one asking Millennials what features are most likely to affect their home buying decisions.
Of the top 10 features mentioned by home builders, four have to do with energy efficiency: low-E windows, Energy Star-rated appliances and windows, and programmable thermostats. The top features include a master bedroom walk-in closet and a separate laundry room.
Least likely features include high-end outdoor kitchens with plumbing and appliances, and two-story foyers and family rooms. “Consumers don’t like them anymore, so builders aren’t going to build them,” Quint said.
If they can’t quite afford that first home, respondents reportedly said they’d be happy to sacrifice extra finished space or drive a little farther to work, shops and schools, but are unwilling to compromise with less expensive materials. A whopping 75% of this generation wants to live in single-family homes, and 66% of them prefer to live in the suburbs. Only 10% say they want to stay in the central city. Compared to older generations, Millennials are more likely to want to live downtown, but it’s still a small minority share, Quint said.
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