What Millennials Want in a New Home

Think all Millennials, or Gen Y, are looking for chic city abodes within walking distance to work, shops and restaurants? Think again. That’s only one misconception about this generation shattered by recent research.

Two young girls and four young boys make a photo shooting in the park. The boys wear shirts, while the girls wear T-shirts.

Millennials are poised to affect the housing market in a big way. A recent study found that about a quarter of this generation already owns a home, while 60 percent plan to purchase in the future.

This year, it’s all about the Millennials, who in 2015 are expected to surpass the Boomers as the nation’s largest living generation.

A recent report — the 2014 Consumer Insights Survey — by John Burns Consulting found that by sheer number, the generation is huge — 92 million — making them the largest generation of possible homebuyers we’ve seen. Their imprint on home design will span decades and their expectations regarding technology 
promise to revolutionize housing. Here’s a look at what Millennials want in a new home and why: 

All About Millennials

This segment was born between 1980 and 2000, which means the youngest are in their mid-teens and the oldest are just hitting 35. Many are still in school, some aren’t old enough to drive and quite a few are in the rental market. They are delaying children and marriage, traditional triggers for home buying, until their mid-twenties or later.

Contrary to reports that the recession has left Millennials disillusioned about owning a home, 75 percent believe homeownership is an important long-term goal and 73 percent see real estate as a good investment. About a quarter already own a home and 60 percent plan to purchase in the future. According to estimates, Millennials aged 25-plus account for 15 percent of new home shoppers. Lending constraints, student debt and down payments are still hurdles, but as the economy and jobs improve, substantially larger numbers of these buyers will shop for homes. Over the next five years, Millennials are expected to account for about two-thirds of new households, increasing to 21.6 million households by 2018.

What A Generation Wants

Millennials have long been touted as the generation that prefers city over suburbs, but multiple recent studies show that city living only appeals to a small portion, from 5 to 16 percent (depending on the study), while 55 to 66 percent say they prefer the suburbs. On the other hand, younger Millennials who are renting definitely favor urban settings. 

Because the generation is so large, even the small percentage opting for city dwellings — 10 percent, according to 2014 data from the National Association of Home Builders (NAHB) — translates into big numbers, observes Rose Quint, NAHB’s assistant vice president of research. And if they can’t quite afford that first home, respondents to NAHB’s survey would sacrifice extra finished space or drive farther to work, schools or shops. One compromise they won’t make is on quality of materials.

Three-quarters want a single-family home. When asked about home size, 2,475 square feet is what a majority would like to have. Two-story homes (52 percent) and 
open concept floor plans (78 percent) were also preferences in NAHB’s research. For bedrooms, 81 percent said they wanted either three or four and two or two and a half baths would be fine.

How a home lives is more important than any one feature, a characteristic shared by almost all buyers today. And compared to first-time buyers in the past, Gen Y has a much clearer vision of how to achieve that desired lifestyle, now and in the future.

“The next generation of homeowners wants smart, stylish homes that enable them to connect with friends and family,” Jill Waage, editorial director for home content at Better Homes and Gardens, said during a presentation at the 2015 International Builders’ Show. “Our research shows that women 35 and under see value in owning a home and their attitudes toward making space livable through smart technology and integrated design are significantly stronger than those of their older cohorts. The next generation of homeowners will lead the way in adopting new technology — making features like the ability to preheat an oven or unlock the front door from your smartphone the new norm in home convenience.” 

Why Design Matters

“Home design is one of the top motivating factors,” says Mollie Carmichael, a principal in John Burns Consulting. Design emerged as the No. 1 trend for Millennials in Burns’ study. Also topping the list was a focus on function over size.

The most desired feature? Quint says it’s a laundry room, with 55 percent of Millennials saying they just wouldn’t buy a new home without one. Surprisingly, exterior lighting came in second, with 88 percent saying it was essential or desirable. Storage is also important, with linen closets, a walk-in pantry and garage storage making the top 10 most desired features.

Another myth buster, according to Carmichael, is that “Gen Y is not all about contemporary.” Instead, when asked to choose a preferred style from photos reflecting a range of popular designs in Burns’ research, Millennials selected “Modern Traditional” as the most preferred style, followed by “Style on a Budget,” “Casual Organic” and “Modern.”

Outdoor living also comes out on the top in Better Homes and Gardens’ survey, “You and Your Home,” with three out of four of those under 35 saying 
outdoor space is important for entertaining and 51 percent dreaming of having an outdoor kitchen sink, cooktop, refrigerator and grill. In comparison, only 25 percent of those over age 55 and 37 percent of those 35-55 desired those features, says Waage.

About half of those under 35 report that their current use for outdoor space is limited to grilling, yet a majority want their space to feel like a relaxing retreat for entertaining. And they were more likely than older generations to use their outdoor space for meals and to decorate as they would their living and dining rooms. 

Energy efficiency is important, but whether or not it’s something this next gen will pay extra for is uncertain. However, NAHB’s survey says they would pay 2 percent to 3 percent more for energy efficient features.

Community features are important, but 47 percent do not want to live in a high-density community. Also out are homes in golf course communities. Pets also matter and pet amenities — whether it is in the community or the home — continue to be important.

Camilla McLaughlin is an award-winning writer specializing in house and home. Her work has appeared in leading online and print publications, such as Yahoo! Real Estate, Unique Homes magazine and Realtor Magazine. She has also freelanced for the Associated Press.

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