Millennials Leading the Way
As the housing recovery presses onward, a new generation of buyers is leading the way: millennials. Not only is this younger generation full of fresh enthusiasm for homeownership, but they have a fresh idea of what their homes should look like, and—according to NAHB—builders are catering to these ideas to help fuel the housing recovery.
“As the economy recovers and young people who had to live at home with their parents move forward with their lives and achieve their dreams of homeownership, home builders are delivering homes that cater to the floor plans, features and affordability that this generation desires,” says NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C.
What are these desired features? The No. 1 is energy efficiency. More than 80 percent of Generation Y home buyers—people born in 1977 or later—said in NAHB’s 2012 consumer preference survey they prefer a highly energy efficient home that results in lower utility bills during the home’s lifetime over a lower-priced home without energy efficient features. Today’s new homes feature ENERGY STAR-rated appliances; windows, doors and insulation that better control the home’s interior climate; and other modern components such as tankless water heaters and HVAC systems that save costs on utility bills.
And cost-conscious young buyers will be happy to hear that a new home actually costs less to maintain than an older home. An NAHB study found that homes built before 1960 have average maintenance costs of $564 a year, while a home built after 2008 averages $241. Plus, mortgage rates are still very low, bolstering affordability for home buyers.
Mark Woodroof, partner of Better Homes and Gardens Real Estate Gary Greene in Houston, said the young buyer trend is answering a long-standing question of whether younger buyers would rather rent or buy.
“We’re seeing now that homeownership is still the fabric of the American Dream,” Woodroof said. “First-time buyers are focused on lifestyle and location first, and the house becomes a product of that. This is much different than the Baby Boomers who were looking for the biggest home they could buy. Today’s first-time buyers are more conservative with their budget, because they still want to have money in the bank; they don’t want to be house poor.”
He added, “They are interested in things like the community, walking scores and the local infrastructure, as well as efficiency both with green features but also in size—they aren’t buying more house than they need.”
Dennis Walsh, CEO of REbuild USA and a leading industry trainer in new home sales and agent certification, encourages builders to recognize how younger buyers want to integrate technology into their home.
“Now there are apps you can have on your smartphone that allow you to control home temperature, or from a security standpoint, you can monitor camera from your phone,” Walsh said. “Another thing younger buyers are looking for is “flex” space that can be used for multiple purposes, providing them the ability to change their living space as their lifestyle needs evolve.”
He added, “Younger buyers who are used to, and enjoy, apartment-style living are now also surprisingly looking for one-floor homes, a trend that we were formerly seeing with older generations.”
NAHB noted that Generation Y buyers also favor media and game rooms more than any other specialty rooms for their next home. New homes today not only contain these spaces, they are outfitted with the state-of-the-art electronic and wiring components that can accommodate high-definition televisions, full-house sound systems, hard-wired fire and security alarms and more.
Young buyers can connect with many of the new designs and features being included in homes built by NAHB members at its social media communities and website, nahb.org.
“The time has never been better for young people to become home owners, whether it be a new home or existing,” says Judson. “There are outstanding opportunities in the current market, with near record low interest rates, competitive prices and new homes being built that include open layouts, energy efficient components and other features that cater to young buyers.”
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