Millenials want smaller, smarter homes
Younger, first-time buyers are expected to enter the housing market, but they'll want smaller, more affordable and smarter homes, predicted a building official during the International Builders' Show held in January in Las Vegas.
Laundry rooms will be essential and home technology will become increasingly prevalent, according to speakers.
Rose Quint, assistant vice president of research at the National Association of Home Builders, unveiled the results of two surveys and cited encouraging economic data during a panel discussion and press conference on buyer and building trends.
Job growth and favorable financing bode well for builders, Quint said. She noted 3 million new jobs were created in 2014, the most since 1999. She believes that fact, combined with reduced down payment requirements for first-time buyers and only moderate increases in home prices will spur activity.
"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."
One survey polled builders on what features they are most likely to include in a typical new home this year. The second survey asked millennials what features would most likely affect their home buying decisions.
Of the Top 10 features mentioned by home builders, four pertained to energy efficiency: Low-E windows, Energy Star-rated appliances and windows, and programmable thermostats. Topping the list were a master bedroom walk-in closet and a separate laundry room.
Less appealing were 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.
When researchers asked millennials to prioritize features on their shopping list, a separate laundry room topped the ranking. Fifty-five percent of respondents said they would not buy a new home that didn't have one.
Storage is also popular among this cohort, with linen closets, a walk-in pantry and garage storage making the Top 10. Energy Star certifications joined the list, with respondents indicating they would be willing to pay a small premium (2-to-3 percent more) for energy efficiency that would yield lower power bills.
Asked what they would sacrifice if a first home seemed unaffordable, respondents mentioned finished space and a willingness to drive a little farther to work, shops and schools. They are unwilling to compromise with less expensive materials.
By a wide margin, this group prefers single family homes. Seventy-five percent want a single family dwelling, and 66 percent of them prefer to live in the suburbs. Only 10 percent expressed a desire to stay in the central city. Compared to older generations, millennials are most likely to want to live downtown, but Quint emphasized it is still a small minority.
Panelist Jill Waage, editorial director for home content at Better Homes and Gardens, discussed millennials' twin desires for outdoor living and a seamless use of technology, and how both trends influence home buying and home renovation decisions.
Noting millennials tend to have less ready cash and less free time compared to older home owners, Waage said they seek less expensive, low-maintenance choices like a brightly painted front door, strings of garden lights and landscaping that needs less watering and mowing.
This age group is also very comfortable with the smart phones and tablets, Waage remarked. Increasingly, they're seeking ways to use their phones to control their heating, air-conditioning, security and lighting, along with electronics like televisions and sound systems. "They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door," she explained.