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December 2015

Research confirms "green" as future of home building

Green and Healthier Homes coverHalf of home builders who took part in a nationwide study expect to build at least 60 percent of their new homes "green" by 2020. Researchers also reported the greatest impetus for green comes not from millennials, but from consumers age 55 and older.

Those were among findings in a newly-released report commissioned by the National Association of Home Builders (NAHB).

The study conducted by Dodge Data & Analytics in partnership with NAHB concluded a high percentage of home builders and remodelers are already building green and expect to do so in the future "despite the headwinds created by growing concerns about the cost of building green."

Analysts say green homes provided support to the ailing residential market and promise to be an important element of the recovering market as well. Consumers' association of green with healthier homes and increased use of renewable technologies will propel growth of green homebuilding, according to the research.

Builders believe consumers are willing to pay a premium for homes with sustainable features: 83% of survey respondents believe buyers will pay more for healthier, high-performing homes.

The latest study, titled "Green and Healthier Homes: Engaging Consumers of All Ages in Sustainable Living" surveyed 232 builders and remodelers from across the U.S. Their responses to questions about plans and perceived benefits included:

  • Over half (54%) of home builders are currently constructing at least 16% of their new homes green, and 39% of remodelers report that at least 16% of their remodeling projects are green.
  • By 2020, more than eight of every 10 home builders (81%) will be constructing that level of green, with over half (51%) building at least 60% of their new homes green.
  • By 2020, remodelers report a similar level of growth, with nearly three quarters (74%) making at least 16% of their projects green, and over one-third (36%) completing over 60% of their projects green.

Increasing use of renewable technologies is also contributing to growth. The study revealed an interest in energy performance that goes beyond green. By 2018, nearly half of home builders and remodelers expect to be using solar photovoltaic (48%) and ground source heat pump (52%) technologies. Net zero homes are also emerging as an important trend, with 21% of home builders having built a net zero home in the last two years.

Researchers noted expectations of higher green involvement emerged despite growing concerns about the cost of building green. More than three-fourths of builders and remodelers (77%) report that building green has an incremental cost over traditional construction of 5% or more. That is notably higher than the 60% in 2014 and 58% in 2011. "While higher cost is also the top obstacle to green, it does not appear to have dampened the drive toward green in the market," the report concluded.

"Builders and remodelers have long recognized that green is the future of home building," said NAHB Chairman Tom Woods, a home builder from Blue Springs, Missouri. "Since we first began partnering on this study with Dodge Data & Analytics in 2006, we've seen that commitment grow."

Woods also said the study's recent findings reinforce continued growth, with new homeowner feedback showing a desire and expectation that new homes be high-performing, particularly when it comes to energy conservation. "Most builders recognize that they need to be at least conversant in green to stay competitive."

The "Green and Healthier Homes" study is the fifth in a series of reports since 2006 that provide research on what home builders and remodelers report about their level of green involvement currently and in the future, the key triggers and obstacles for green, and the importance of green building products and features to achieve sustainability goals. It may be downloaded by clicking here.

Ply Gem Industries, a leading manufacturer of exterior building products in North America provided support for the research.

Dodge Data & Analytics is the leading provider of data, analytics, news and intelligence serving the North American construction industry. Building product manufacturers, general contractors and subcontractors, architects and engineers use its research to size markets, prioritize prospects, target and build relationships, strengthen market positions, and optimize sales strategies.