LOS GATOS — As millennials enter the home-buying market in larger numbers, builders say homes will get a little smaller, energy-efficient appliances and laundry rooms will be essential, and home technology will become increasingly prevalent. These predictions are based on two surveys conducted by the National Association of Home Builders, one asking home builders what features they are most likely to include in a typical new home this year, and one asking millennials what features are most likely to affect their home-buying decisions. Of the top 10 features mentioned by home builders, four have to do with energy efficiency: low-E windows, Energy Star-rated appliances and windows and programmable thermostats. The top features are a master bedroom walk-in closet and a separate laundry room.
Least likely features include high-end outdoor kitchens with plumbing and appliances, and two-story foyers and family rooms. This is because these features rate the lowest in their millennial survey. “Consumers don’t like them anymore, so builders aren’t going to build them,” said NAHB assistant vice president of research Rose Quint.
When NAHB asked millennials what features fill their “most-wanted” shopping list, a separate laundry room topped the list, with 55 percent responding they wouldn’t buy a new home that didn’t have one. Storage, linen closets, a walk-in pantry and garage storage made the top 10, along with Energy Star certifications. Respondents were willing to pay 2-3 percent more for energy efficiency, as long as they can see a return on their power bills.
If they can’t quite afford that first home, respondents said they’d be happy to sacrifice extra finished space or drive a little farther to work, shops and schools, but are unwilling to compromise with less expensive materials.
At an International Builders’ Show on home trends and home preferences, Jill Waage, editorial director for home content at Better Homes and Gardens, discussed the importance of outdoor living to millennials, as well as their knack for technology. Since they generally don’t have as much ready cash or free time, millennials opt for less expensive, low-maintenance choices, like a brightly painted front door, strings of garden lights, landscaping that needs less watering and mowing and larger patios.
Millennials increasingly seek ways to control their heating, air conditioning, security, lighting and electronics, like televisions and sound systems, from their phones. “They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door,” said Waage.
“Although millennials are delaying household formation, including marriage and homeownership, studies continue to show their desire to own a home remains strong,” said Chris Isaacson, president of the Silicon Valley Association of Realtors.
A survey from the Demand Institute indicates that over the next five years, 8.3 million new millennial households will form nationwide. The same survey found 75 percent believe homeownership is an important long-term goal and 73 percent believe ownership is an excellent investment. Seventy-four percent of those surveyed plan to move over the next five years, with the top reason being need for better housing--48 percent prefer to own, not rent.
Additionally, the California Association of Realtors’ “2014 California Millennial Survey” that polled 1,000 California residents ages 18-34 also found more than half expect to buy a home in the next five years.
“Millennials are optimistic about homeownership and future home prices. It is very likely we will see the share of first-time home buyers grow, especially with the latest move by Fannie Mae and Freddie Mac to lower down payments to 3 percent for first-time home buyers,” added Isaacson.
Home builders are optimistic, too. “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. Builders will build whatever demand calls out for,” Quint said in the NAHB report. Information is presented by the Silicon Valley Association of Realtors at silvar.org . Contact firstname.lastname@example.org .