Millennials Show a Growing Preference for New Homes
Among general housing preferences, there is a noticeable upward trend in the percentage of millennials who desire a new home built for sale offered by a builder, according to a recent study by the NAHB Economics team.
Between 2007 and 2018, the percentage of millennial home buyers who prefer a new home increased from 28% to 41%. This increase seems to be at the cost of the desire for a home custom-built on the eventual home owners’ lot, which fell from 37% to 18% over the same period.
Preference for an already existing home hovered around 40% during this 11-year time span.
How do millennial preferences compare to older generations over time? As Figure 2 below shows, in general, these demographic groups show a similar decline in custom preference while the desire for existing homes shows no underlying trend.
However, when it comes to a new home built for sale and offered by a builder, Gen X, baby boomers and seniors are all grouped near a 30% preference level while millennials have a clear upward trend in this category over time, and finish significantly higher than the other generations in 2018.
While this indicates shifting preferences for millennials, it is still important to note that the market for housing is heavily tilted toward existing homes, which is almost five times bigger than the market for new homes, according to data from the U.S. Census Bureau and the National Association of Realtors.
*Note: All articles have been redistributed from NAHBnow.com*