Millennials lead the way in growth of new home buyers

millennial couple moving into new home

Young adults in the millennial generation are leading the charge when it comes to new home buyers. Recent data from the United States Census Bureau confirms that more millennials are entering the housing market as first time buyers, with millennials representing 36 percent of homeowners overall.

The homeownership rate of millennials – those who were born between the early 1980s and mid 1990s – registered the largest gain among all age groups in 2017, according to data reported by the National Association of Home Builders (NAHB).

Millennials are the largest demographic group in the country, with more than 70 million either approaching or reaching the typical age of home buying within the months and years ahead. This makes the millennial generation an important demographic for the housing economy.

“Millennials are recognizing the benefits of homeownership and are eager to buy their first homes,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “And contrary to conventional wisdom, this generation is in the market for single-family homes in the suburbs as they look ahead to raising their families.”

It’s no denying the millennial generation is changing the state of today’s housing market. Builders are recognizing the changing demographics in today’s market, too. Increased demand for entry-level housing is something on every home builder’s radar; however, rising construction costs and lot shortages continue to challenge the market. Building single-family detached houses that are both affordable for first time buyers and cost-effective for builders seems to be at the forefront of today’s homebuilders’ list of concerns.

According to the NAHB, townhouses and condos are becoming more popular, as they can often provide a more affordable alternative to single family detached housing. Millennials are apparently willing to compromise on space if they can get the amenities and location they want at an affordable price.

After a sharp decline following the Great Recession, new townhome construction has been on the rise since 2009. According to the NAHB’s analysis of the Census data, townhome construction was up seven percent in 2017 from the year before.

Millennial home buyers are also looking for specific home design features, the data revealed. On average, the millennial home buyer wants three bedrooms, two bathrooms, outdoor space, flexible areas that can serve multiple purposes, and more luxurious finishes such as quartz countertops.

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