Home Trends & Millennials’ Home

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JANUARY 21, 2015 || 8:00 – 9:00 AM

Presenter:

Rose Quint || NAHB Economics, Washington, DC

1. Characteristics of New Homes Built in 2014

2. Characteristics of New Homes Coming in 2015

3. What Millennial Home Buyers Want

Characteristics of New Homes Built in 2014

1,500

1,700

1,900

2,100

2,300

2,500

2,700

2,900

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

2,642

2,362

2,499

2,662

Source: U.S. Census Bureau.

Note: Data for 2014 is based on the first two quarters.

Average Size of New Single-Family Homes Started(Square Feet)

After rising for

4 consecutive

years, home

size began to

recede in 2014.

Homes with 4+ Bedrooms(% of single-family homes started)

0

5

10

15

20

25

30

35

40

45

50

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

47%

34%

39%40%

42%46% Share of new

homes with 4+

bedrooms:

About even from

2013 to 2014

46% to 47%

Homes with 3+ Full Bathrooms(% of single-family homes started)

0

5

10

15

20

25

30

35

40

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

36%

27%

23%

28%30%

35% Share of new

homes with 3+

full bathrooms:

About even from

2013 to 2014

35% to 36%

Homes with 3+ Car Garage(% of single-family homes started)

0

5

10

15

20

25

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

20%

16%

23%

18%

20%

22% Share of new

homes with 3+

car garage:

About even from

2013 to 2014

22% to 23%

Homes with 2+Stories(% of single-family homes started)

0

10

20

30

40

50

60

70

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

58%57%

51%

57%54%

Share of new

homes with

2+stories:

Even from

2013 to 2014

at 58%

What Will Happen to Home Size in 2015?

Average will likely continue to recede

WHY?• 3M jobs created in 2014 – most since 1999

• New rules to loosen credit tightness

• Moderate home price growth in 2014

Will allow more people (young, 1st-time buyers) to

enter market.

They will demand smaller, more affordable homes.

Characteristics of New Homes

Coming in 2015

(Based on a survey of builders nationwide in December ‘14)

10 MOST LIKELY Features in Typical Single-family Home in 2015(1=Not at all likely, 5=very likely; avg. rating)

4.3

4.4

4.4

4.4

4.4

4.5

4.7

4.8

4.8

4.9

Granite countertop in kitchen

2-car garage

Programmable thermostat

Energy-Star rated windows

9' feet+ in 1st floor ceiling

Energy-Star rated appliances

Great room (Kitchen-Family room-Living

room)

Low-e windows

Laundry room

Walk-in closet in master bedroom

10 LEAST LIKELY Features in Typical Single-family Home in 2015(1=Not at all likely, 5=very likely; avg. rating)

2.9

2.7

2.6

2.5

2.3

2.3

2.1

2.1

2.0

1.9

Flooring on main level: Carpeting

Whirlpool in master bathroom

Walking/Jogging trails in community

Two-story foyer

Media room

Two-story family room

Sunroom

Outdoor fireplace

Laminate countertop in kitchen

Outdoor kitchen (cooking, refrigeration, &

sink)

What Millennial/Gen Y Home

Buyers Want

Type of Home Wanted

Single-family: 75% Townhouse: 11%

Multifamily Apartment: 4% Manufactured Home: 3%

Type of Area Preferred

15

Suburbs: 66%

Central City: 10%

Rural: 24%

1,728

2,475

Currently Have Would Like to Have

Home Size(Median Square Feet)

Millennials

want 43%

more space

than they

have now.

19%

27%

28%

31%

35%

43%

53%

Less expensive materials

Smaller house

Fewer amenities

Smaller lot

Longer commute to work

Farther away from shopping,entertainment

Unfinished spaces

Willing to Accept to Make Home Affordable(% of Gen Y Respondents)

5%

8%

10%

78%

Oversized kitchenand no family

room

Side-by-side, withfull wall

Completelyseparate areas of

house

Open, completelyor with half wall

Most Want Kitchen Open

to the Family Room, and..

(% of Gen Y Respondents)

12%

35%

52%

Split-level

Single-story

Two-story

A Two-Story Home

0%

7%

35%

46%

11%

One Two Three Four Five ormore

81%

Most Millennials Want 3 or 4 Bedrooms

(% of Gen Y Respondents)

11%

30%

34%

16%

10%

Up to 1½ 2 2½ 3 3½ or more

64%

2 ½ Baths Are Enough for Most Gen Y Buyers(% of Gen Y Respondents)

The Most Wanted List(% of Gen Y Respondents)

55%

38%

28%

21%

34%

43%

41%

29%

27%

42%

28%

35%

50%

60%

65%

51%

41%

43%

55%

57%

41%

55%

Laundry room

Exterior lighting

Energy-Star rated appliances

Energy-Star rating for whole home

Linen closet

Living room

Ceiling fan

Walk-in pantry

Garage storage

Exhaust fan

Front porch

Essential/Must Have Desirable

90%

88%

88%

86%

85%

84%

84%

84%

84%

83%

83%

Most “Unwanted” List(% of Gen Y Respondents Rating “Do Not Want”)

30%

31%

32%

44%

47%

47%

57%

64%

Laminate countertop

Wet bar

Wine cooler

Gated community

Only a shower stall in master bath

High density community

Home in golf course community

Elevator

Most Millennials Will Pay 2%-3% more for Energy Efficient Home

(% of Gen Y Respondents)

16%

84%

A home without energyefficiency features that costs 2-

3% less

A highly energy efficient homew/ lower utility bills over

home's life

Most Would Be Seriously Influenced to Move to a Community if It Had…

(% of Gen Y Respondents)

51%

54%

55%

58%

Outdoor swimming pool

Playgrounds

Walking/jogging trails

Park area

Rose Quint

ASVP Research

NAHB Economics

202.266.8527

1201 15th Street NW

Washington, DC 20005

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