Millennials, according to What Home Buyers Really Want (2019 Edition), want single-family homes that average in 2,407 square feet. The median square footage of a home that millennials want is slightly higher than Gen X generations. As an investor, how can you cash in on these needs? Invest in single-family rental portfolios over at SFRhub.com and find your next investment opportunity.
Millennials (those born in 1980 or after) want a median of 2,407 square feet in a home, according to the NAHB report, What Home Buyers Really Want (2019 Edition). The report is based on a survey of prospective and recent home buyers and asks them about the features they want in a home and a community.
The median square footage Millennials want in a home is slightly higher than the Gen X generation (2,280 sq. ft.), and significantly more than Boomers (1,913 sq. ft.) and Seniors (1,869 sq. ft.) (Figure 1). Millennials are most likely looking for larger spaces because they are at the age most associated with starting a family. Boomers and Seniors, on the other hand, are most likely empty nesters or retirees, looking to downsize.
Millennials are the generation most likely to want a ‘brand new home offered by a builder’: 41 percent of Millennials want this, more than the shares of Gen X’ers (28 percent), Boomers (29 percent), and Seniors (31 percent) (Figure 2). Millennials, however, are the least likely to want ‘a home custom built on a lot you own’, compared to 25 percent of Gen X’ers, 23 percent of Boomers, and 27 percent of Seniors. Forty-one percent of Millennials want to buy an existing home, slightly lower than Gen X’ers (47 percent), Boomers (48 percent) and Seniors (43 percent).
Across all generations, a majority of buyers want a single-family detached home: 75 percent of Millennials, 79 percent of Gen X’ers, 78 percent of Boomers, and 63 percent of Seniors (Figure 3). Fifteen percent of Millennials want a townhouse/single-family attached, about the same share as Boomers (12 percent) and slightly more than Gen X’ers (10 percent). It is important to note that a sizable share of Seniors – 24 percent – want a townhouse/single-family attached unit. Across the board, multifamily apartments or condos are not popular, but it is important to note that 7 percent of Millennials want this structure type, slightly more than Gen X’ers (5 percent), Boomers (3 percent), and Seniors (2 percent).
The report also shows that Millennials expect to pay a median of $260,400 for their home, second only to Seniors who expect to pay a median of $271,953. Gen X’ers ($250,629) and Boomers ($252,498) expect to pay similar amounts for their homes, but less than that of Millennials (Figure 4). Interestingly, combining the price buyers expect to pay for a home with the amount of space that they want shows that Millennials would pay the least per square foot among the generations ($108 per sq. ft.). Gen X’ers would pay $109 per sq. ft., Boomers $131 per sq. ft., and Seniors the highest at $145 per sq. ft. This is consistent with other results from the survey showing that Millennials are more willing than other generations to accept less expensive finishes and fewer amenities—but not less square footage—to make the home more affordable.
The What Home Buyers Really Want report shows that a considerable share of Millennials home buyers want new and spacious single-family detached homes. It is important to note that these homes typically command a premium compared to other types, pushing them out of reach to many first-time home buyers.
For additional information, an August 2019 NAHB study showed the history of Millennials’ preferences for select housing characteristics. The greatest level of detail—including preferences for hundreds of items broken down by generation, by geography, first-time vs. repeat buyer, household composition, race, income, and price expected to pay for the home—is available in the 2019 edition of What Home Buyers Really Want.
Contact Jeff Cline at SVN | SFRhub Advisors
SVN | SFRhub Advisors
2400 E. Arizona Biltmore Circle
Phoenix, AZ 85016