Millennials are going to be a big force in the housing industry in the years to come, but for homebuilders, they may be trouble. Columnist Jeff Reeve writes in The Wall Street Journal that homebuilders should be worried about millennials’ impact to their bottom line.
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The generation tends to have a personal taste for urban living and they’re financially strapped so they have less income and a lot of student loan debt that will likely prevent them from taking on a hefty mortgage. What’s more, they don’t show a high desire for living in suburbia, where many builders are centering their projects.
For now, many millennials are living with their parents or roommates, which has helped form what some experts estimate at more than 2 million “missing households,” according to a report by NPR. One in five people in their 20s and early 30s are currently living with their parents, and about 60 percent of young adults report receiving financial support from their parents, The New York Times reports. It’s a big difference from a generation ago, where only one in 10 young adults moved in with their parents and few reported receiving financial support.
Some builders have responded by starting projects that are more walkable, reflecting millennials tastes. Millennials have said they prefer smaller, functional homes to sprawling “McMansions” and they’re not interested in “cookie-cutter” homes that look like all the others on the block, according to surveys conducted by Better Homes and Gardens of 1,000 adults aged 18 to 35.
The nation’s largest home builder, D.R. Horton, announced this spring that it was going to reach out to the entry-level market by offering a new brand, Express Homes, with properties priced between $120,000 and $150,000. Express Homes will mostly be centered in Texas, Florida, and Georgia.