By: Peter Thomas Ricci
New, or used? Detached, or townhome? Environmentally friendly? Close to work? Near shopping centers and entertainment venues?
The number of options available to homebuyers in our real estate market is limitless, and NAR’s latest Home Buyer and Seller Generational Trends report underscores that fact.
Here are the seven most notable findings from the report, regarding the homes consumers purchased last year:
1. New Homes Come with Age – The overwhelming share of homebuyers (84 percent) purchased an existing home in 2015, but an interesting pattern emerged among older generations. For all generations older than Millennials, 19 percent bought a new home, compared to just 11 percent of Millennials. No doubt, the rising price of new homes played a role in that generational divide.
2. Millennials Love Affordability, Hate Renovations – Regarding why consumers bought a new or existing home, NAR found that Millennials were at the extreme end of both pillars. For new homes, 46 percent of Millennials (far more than the average of 34 percent) cited an avoidance of renovations or plumbing/electrical problems as the main reason for their purchase, while for existing homes, 41 percent (compared to a 32-percent average) cited the homes’ better price. Clearly, affordability and expense are two key issues for Millennial buyers.
3. Detached Madness – Despite recent evidence that more and more consumers desire urban, walkable environments, the single-family detached home is still the overwhelming favorite among consumers, with 83 percent of buyers opting for that style; even among city-loving Millennials, 84 percent bought a detached home, with only 1 and 2 percent, respectively, buying a condo or duplex.
4. Diversity of Environment – The prominence of singe-family homes, though, does not translate to equal popularity for suburban environments. Although a majority of buyers (52 percent) purchased a home in a suburb or subdivision, 20 percent bought in a small town, while 14 and 13 percent bought in cities and rural areas, respectively. The suburbs were most popular with Gen X buyers (at 58 percent), while cities were most popular with Millennials (17 percent); interestingly, small towns were the most popular with the Silent Generation, at 29 percent.
5. Heating, Cooling and Commuting – NAR has noted for some time now how important environmental factors are to homebuyers, and its new study found a number of factors that buyers rated “very important.” At 35 percent of all buyers, heating and cooling costs were the most prevalent concern, and indeed, all but one of the generations (including 37 percent of Gen Xers and 38 percent of Young Boomers) made it their No. 1 priority; the one standout was the Millennial generation, with 35 percent rating commuting costs their chief concern.