Young home buyers rally housing market: Why it matters
If someone had told you 10 years ago, “Millennials will be the driving force behind the housing market rally,” you may have laughed. Saddled with debt, entering the job market so soon after a financial crisis, and with an assumed aversion to the suburbs, the general thought was that millennials would revel in bohemian city living. But the numbers and trends show that that simply wasn’t true.
Today, we’ll look at why it matters that millennials are now the leaders of the home ownership rally. We’ll show you how home builders can adjust to the needs of this new generation of home buyers. And we’ll share what 2-10 Home Buyers Warranty (2-10 HBW) does to help builders speak to these needs.
Why are millennials buying more houses, especially in the suburbs?
According to the NAHB, home ownership rates consistently fell between 2007 and 2016. This was a period when many millennials would have normally began looking for houses. But due to low supply and the negative effect the Great Recession had on millennial finances, most millennials couldn’t find a home in their budget.
Though delayed, millennial home ownership stats have rallied since 2016. Millennials began to catch up financially and had a greater need for houses as they entered their 30s. That brought the overall home ownership rate up. After a brief pause at the beginning of the COVID-19 pandemic, home ownership continued to climb, thanks in part to historically low interest rates.
Finally, millennials have been clear about what they want in a home. Namely, they want affordability and space, a sense of community, and customization. These are three huge wants that have driven them to the suburbs, despite assumptions that they’d never do so.
Why should builders care about millennial home buyer trends?
The things that millennial home buyers want are things that builders are specially qualified to provide. Space, a sense of community, and customization are the three most obvious aspects you can address.
By addressing these needs, you can attract more millennial buyers. That’s especially true when you consider how low pre-owned home inventory is. As of December 2020, there was a mere 1.9 months of existing home supply. That’s almost a record low.
With demand for homes still holding strong, this could be a good opportunity for new-home builders.
How can builders adjust to the needs millennials have?
Regarding space, millennials have debunked the myth that they don’t want to live in the suburbs. So, you need not fear that tract housing in the suburbs will lie empty. This can provide the space to build homes that will entice millennials, especially if you provide the kinds of amenities millennials really want.
Building near mass transit, community centers, and mom-and-pop stores are a great way to build a sense of community. Even better, if you can carve out space for parks and walking trails, it can give buyers a sense of connectedness without the hustle and bustle (and higher costs) of urban life.
Finally, let’s talk customization. Millennial buyers aren’t likely to request an entirely custom-built home. Homes that are low maintenance (both in actual maintenance, and finding and purchasing) are still more popular. However, you can speak to this need by designing homes with open floor plans and multi-use rooms.
What does 2-10 HBW do to help builders succeed?
2-10 HBW provides industry-leading structural warranty coverage, along with coverage for the home’s systems and appliances. That speaks to millennials’ desire for affordability. If one the homes you build suffers an unexpected structural defect, this warranty can protect you and them. With the cost to address a structural issue ranging from $42,000 to $113,000, having protection really matters.
On top of that protection, covering your homes with a 2-10 HBW structural warranty can help you build trust. Consider two important stats:
- 94% of prospective home buyers say that they are more likely to purchase a new home from a builder that offers a structural warranty.
- 4 of 5 buyers value a third-party, insurance-backed structural warranty.
In addition, a structural warranty from 2-10 HBW provides important third-party validation of your work. When the industry leader says, “This builder builds high-quality homes,” it means a lot to buyers.
- Millennials are the biggest drivers of the home ownership rally over the past five years.
- Builders who understand what millennials are looking for may be able to take advantage of low pre-owned housing inventory and high demand for space.
- 2-10 HBW provides structural warranties to protect builders and buyers against unexpected defects.
- A third-party warranty can build trust and provide important third-party validation to your prospects.
Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW structural warranty.