After rising for four consecutive years, the average size of new homes declined in 2014. The expectation for 2015 is for this receding trend to continue, as more Millennials enter the housing market and demand smaller, more affordable homes. Strong job growth and new lending rules that will allow for smaller down payments and lower mortgage insurance premiums will help drive demand from these buyers.
So where do these mostly first-time buyers want to live?
- 75% want to buy a single-family detached home.
- 66% would prefer to live in the suburbs.
- 24% would opt for rural areas.
- Only 10% would choose to live in the central city (a larger share than among Gen X’ers, Baby Boomers, or Seniors, but still a minority share).
What home features top their wish list?
- Laundry room
- Exterior lighting
- Energy-efficient appliances and energy rating for whole home
- Storage options like linen closets, walk-in pantry, and garage storage
In addition, most Millennials would be seriously influenced to move to a community if it had:
- Park area
- Walking trails
- Outdoor swimming pool
If faced with a choice between a highly energy efficient home with lower utility bills over the life of the home, and one without those features costing 2-3 percent less, the vast majority of Millennials (84%) would opt for the energy-efficient home. Translation: this generation will understand and accept the cost of energy-efficiency options as long as the benefits are clearly spelled out in dollars and cents.
All of these findings were presented during the 2015 International Builders’ Show in Las Vegas. A complete copy of the presentation can be downloaded here .
Interesting article that has really sparked new conversation. Is there anywhere that we can see the raw data and survey methodology?
Millennials are in fact an interesting topic for many industries now.
The complete study is available from NAHB’s online bookstore at: http://ebooks.builderbooks.com/product/what-home-buyers-really-want
Raw data are proprietary.
If Millennials really prioritize energy efficiency, and if they actually knew the per sq foot energy consumption comparison between sfdhs and apartments, one can only assume many would change their minds about sfdhs.