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Young Buying Disproportionate Share of New Homes
Households headed by Generation X-ers and members of the so-called “echo-boom” purchased 55% of all newly built homes sold in 2003 and are fast becoming the trendsetters in U.S. housing markets, according to Census reports and a new NAHB analysis of data on buyer preferences.
“A new generation is viewing the housing market from an entirely different perspective than the baby boomers who have traditionally dominated industry trends,” said NAHB Executive Vice President and CEO Jerry Howard. “They’re techno-savvy and are more likely to be house-shopping on the Internet. They have a strong awareness of all their options.”
Gen-Xers in particular are wielding their buying power to shape today’s new-home characteristics and market trends, and “they are twice as likely to purchase new homes in the immediate future as baby boomers and seniors,” Howard said.
American Housing Survey (AHS) data from the U.S. Commerce Department shows that, while households headed by those aged 27-40 (the “Gen-X” generation) accounted for 28% of all U.S. households in 2003, they made 49% of new-home purchases that year. Echo-boomers born after 1979 made 6% of the purchases; baby boomers, 33%; and seniors aged 60 and up, 12%.
Meanwhile, NAHB research on consumer preferences has found that 37% of Gen-Xers and 27% of echo boomers intend to buy homes in the next two years, compared to just 13% of baby boomers and 6% of seniors.
“Previously there was speculation that younger buyers would be more thrifty than their parents with respect to their housing choices, but our research shows just the opposite is true,” said Gopal Ahluwalia, NAHB’s vice president for research.
Among other findings from NAHB:
- Both echo boomers and Gen-Xers say they would like to have a home that is about 50% larger than their current residence, compared to seniors and baby boomers, who said they want only 17% and 22% more space, respectively.
- Only 46% of echo-boomers currently live in a single-family detached house, but 91% want the next home they purchase to be single-family. Seniors, on the other hand, are more likely than any other age group to want to buy a townhouse, although most still prefer the detached option.
- Sixty-one percent of echo-boomers and 67% of Gen-Xers say they would prefer to have four or more bedrooms in their next house, compared to 40% of baby boomers and 26% of seniors.
- Fully 73% and 77% of echo-boomers and Gen-Xers, respectively, say they want nine-foot or higher ceilings on the first floor, compared to 65% of baby boomers and just 54% of seniors.
- In terms of high-tech amenities, echo-boomers are more likely than any other age group to want a home theater, automated lighting controls and a built-in security system.
“In all, we find that the preferences of younger buyers tend toward greater space and more sophisticated amenities than those of their forebears,” said Howard. “Incorporating these preferences in homes that new buyers can afford will be our industry’s challenge going forward, just as tracking these evolving trends will be an ongoing challenge for NAHB.”
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