With millennials entering the housing market in growing numbers, they’re expected to take the lead when it comes to new home buyers too, according to Census Bureau data analyzed by the National Association of Home Builders.
Currently, around 36 percent of millennials are homeowners, which means they’re making the fastest gains of all age groups, according to the Census data. Millennials are also the U.S.’s largest demographic, and more than 70 million are likely to want to buy a home in the next few years, the NAHB said.
“Millennials are recognizing the benefits of homeownership and are eager to buy their first homes,” said Randy Noel, chairman of the NAHB. “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.”
To cater to these millennial’s demands for new homes, many homebuilders are looking to increase the amount of entry-level homes they’re building. However, challenges exist around rising construction costs and the limited availability of lots to build on. As a result, some construction firms are struggling to build homes that are affordable, yet also cost-effective.
Many believe that town homes could be the answer to this problem. The market for town homes slumped badly during last decade’s recession, but has been growing steadily since 2009. Town home construction grew by 7 percent in 2017 compared to the year before.
Builders are increasingly paying attention to the preferences of millennials too, the NAHB said. The average millennial desires a three-bedroom, two-bathroom home with plenty of outdoor space, flexible multipurpose spaces and luxury finishes such as quartz countertops.