5 trends shaping today’s new housing market
The housing market has been on a full rebound after dismal performance in the years leading to 2014. The U.S. Census Bureau and Department of Housing and Urban Development reported a 12.4% rise in sales of newly built single family homes, which is the highest since 2007. A research by Electrolux and John Burns Real Estate Consulting found that 81% of prospective buyers believe it is a good time to buy. However, these new customers have unique needs and characteristics.
Data from 2015 shows that millenials bought 2 million homes representing a third of the sales. As the economy improves and. the employment levels stabilize, the group in the age bracket 25-34 is expected to drive home sales in the near future.
There has been a surprising interest in home purchases by baby boomers as they look for retirement homes and investment property. They play a double role of buying and selling in the market. Selling as some look for smaller homes to match the downsized living needs in retirement.
The National Association of Home Builder’s reported that the buyers are looking for smaller homes as average square footage decreased from 2,674 to 2,657. This trend is largely driven by baby boomers who want smaller homes that have downsized.
The Chicago Tribune has a recent feature that reported even the affluent segment of prospective buyers are looking for houses that are suitable for their tastes and lifestyles.
More buyers are demanding for homes that offer more functionality. A recent survey by Johns Burns showed that buyers are looking for houses smarter in climate control, lighting, connectivity and entertainment. Buyers are willing to pay more for better technology. Up to 87% of respondents say they will pay for smarter lighting. The technology trend is seeing these smart features like lighting become standard in new homes as buyers demand for more comfort.
More buyers are enlightened on issues around sustainable living such as better energy use, water usage, and waste disposal. This has driven buyers to demand houses with bigger windows to let in more light and save on electricity, for example.
The more concerned buyers are going out of their way to look for houses that have been built sustainably using material like brick.
Rent prices are on an upward climb. Rent has climbed 30% over average incomes. More people are interested in buying but are held back by limited savings and bad credit scores.