Eye On Housing
In NAHB’s latest home buyer preference survey, buyers gave high marks to particular types of green features. Indeed, ENERGY STAR® rated appliances ranked second from the top among 150 different home and community features that buyers rated on a consistent scale. Comparing results over the last several surveys shows a stable trend: preferences for particular green features in 2015 were about the same as they were in 2007 and 2012. The survey also shows that buyers in general are willing to pay more up front to save on future utility bills, but within limits.
Complete results from the latest, 2015 survey were published in Housing Preferences of the Boomer Generation. Although the publication emphasizes boomers, the survey collected data from 4,326 recent and prospective buyers of all ages (the sample was stratified and weighted to reflect the age, geographical distribution, income, and race/ethnicity of U.S. home owners), so boomers could be compared to home buyers irrespective of generation. Among other things, the survey asked buyers to rate 150 different home and community features on the following four-tier scale:
Three of the green features were also rated on this scale in the previous two iterations of the survey (conducted in 2007 and 2012). In 2015, 90 percent of home buyers rated ENERGY STAR® appliances essential or desirable, and 87 percent gave this rating to ENERGY STAR® windows. The percentages for these two features were very similar in 2007 and 2012.
The share of buyers rating “insulation higher than required by code” was 81 percent in 2015, exactly the same as in 2012. The share appeared to be higher in 2007, but the survey question was worded somewhat differently that year, so the results for that particular question from 2007 may not be perfectly comparable to results from subsequent years.
Seven additional green features were added to the survey in 2012. Of these, an ENERGY STAR® rating for the whole home scored very high, with 88 percent of buyers rating it essential or desirable in 2015. In fact, in 2015, ENERGY STAR® appliances, an ENERGY STAR® rating for the whole home, ENERGY STAR® windows, and above-code insulation all ranked among the 10 most popular of the 150 home and community features rated on the four-tier scale. The least popular of the green features was gas (argon or krypton) filled insulating glass in windows. Over the relatively short span between 2012 and 2015, buyer preferences for each of these green features remained quite stable.
Although the above charts show that buyers view many green features as desirable, the charts don’t show how much buyers would be willing to pay for them. The survey addressed this in a question asking home buyers how much extra they’d pay up-front to save $1,000 in utility bills. The answers can be expressed in several equivalent ways.
Expressed as a rate of return, the median amount buyers would pay (meaning half would pay more, half would pay less) implies buyers in 2015 require a 20 percent rate of return to invest in energy efficiency. The average rate of return needed was 9.3 percent. The average is sensitive to a relatively small share of buyers who say they are willing to pay quite a lot up front for future savings in utility bills, and has fluctuated moderately over time. The average rate of return buyers need to invest in energy efficiency was somewhat above 10 percent (equivalent to the 10-year simple payback required in NAHB’s policy on Cost-Effective and Affordable Energy Codes and Standards) in 2007 and 2012, slightly below 10 percent in 2015. Meanwhile, the median rate of return required by buyers to invest in energy efficiency has been perfectly stable at 20 percent.
Preferences for green features is only one of many topics covered in NAHB’s 2015 home buyer survey. Posts addressing other aspects of the survey appeared previously in Eye on Housing on February 11, March 7, March 17 and April 12.
Thanks for the great share! I also like the idea of Home Energy. The best part I like is this: The reliability and availability of modern energy sources cause people to tend to assume that it will always be accessible. And as for the case of non-renewable energy sources, most people do not know or maybe even refuse to accept that it will eventually run out.
Is there an updated report on Home Buyer Preferences for Green Features?
The latest edition of “What Home Buyers Really Want” was published in 2019. Preferences for green features from that were summarized in an Eye on Housing post published on April 4, 2019.
A new, 2021 edition of “What Home Buyers Really Want,” with all the same information on green features, has been written and should be available from BuilderBooks online store in a matter of weeks.