TULSA, Okla. (AP) — Millennials’ much-discussed preference for urban living may be ending.
The Home Builders Association of Greater Tulsa foresees a new housing boom coming as the youngest generation in the workforce emerges from student debt concerns and starts building families.
“This counters headlines that say the American dream is dead,” said association Executive Vice President and Chief Executive Paul Kane. “It’s not. It’s alive and well.”
Quoting surveys by the National Association of Home Builders and other groups, Kane pointed to results finding that 75 percent of millennials - people who reached adulthood since the year 2000 - want to buy single-family homes. He noted that 66 percent targeted a suburban life, while 24 percent sought rural homes. Only 10 percent desired a central city environment.
“When they do start buying, when they do start doing these things, we’re going to feel it,” Kane told the association’s Economic Forecast Luncheon audience Tuesday at Broken Arrow’s Forest Ridge Golf Club. “And it’s going to be a good thing.”
Kane estimated that Tulsa homebuilders would see this wave start within the next five years. John Parsons, vice president of construction lending with PrimeLending in Dallas, projected it could start as early as this year, although others expressed continued concerns over student debt loads and other issues.
Such fears echo a report last week from the Federal Reserve Bank of New York estimating total national student debt at a record $1.16 trillion. That report found that the percentage of student loans 90 days or more overdue rose to 11.3 percent in the final three months of last year.
Coldwell Banker Select President Pete Galbraith acknowledged that many millennials remain skeptical about taking on long-term debt, especially as they struggle to find good-paying jobs. He suggested that could inject new twists in first-time home buying.
“We’re going to see very large growth in the foreign-born vs. native-born home purchasers,” he said. “Underwriting is going to have to reflect that.”
He also said he sees signs of change among younger Americans. He also pointed out that credit availability is trending up and mortgages are becoming easier to obtain, especially from smaller providers.
“I don’t think we’re going to see rates go up a great deal this year,” said Parsons, anticipating further quantitative easing by the Federal Reserve. “I think that has something to do with a lot of new construction opportunities.”
National builder’s project a little over 1 million housing starts this year, Parsons said, twice the activity recorded five years ago.
Kane said Tulsa homebuilders have followed that trend, rising from 1,777 starts in 2011 to 2,814 last year. Many of those builds fall around the 2,475-square-foot size millennials primarily want, according to the survey.
“They want what we’re already providing,” Kane said. “That’s a good thing.”
To keep homes affordable, according to the survey, millennials prefer homes away from shopping districts. Desired amenities range from family needs such as parks, trails, playgrounds and area swimming pools, to individual concerns such as laundry rooms, energy efficiency and high-tech compatibility.
Kane doubted these results pointed to a reversal of urban living styles enjoyed in Tulsa, Broken Arrow and other areas over the last decade. But he did see the surveys as a return to traditional housing trends.
“Once they get their college loans paid off, I think we’re going to see a real surge in homebuyers in this next generation,” Kane said.