New home sales have reportedly doubled in the past couple of weeks, with millennials aged 31 to 40 driving up demand, according to new data from John Burns Real Estate Consulting.
The data shows that most new home buyers are couples and individuals who’ve been looking to buy real estate for some time, and are now finally ready to make a move, the firms said. Older millennials tend to feel more secure in their jobs and are more interested in lower payments than future price appreciation.
The trend has been confirmed by home builders on recent earnings calls, John Burns said.
“First-time buyers are most likely to be living in dense apartments that lack social distancing opportunities, they don’t have a home to sell, and they are comfortable with new technology that includes viewing products and services online,” Ken Perlman and Lesley Deutch, principals at John Burns Real Estate Consulting, said in a column.
The analysts said that around a quarter of couples in their mid-20s and mid-30s have two incomes and a college education, allowing them to skip the entry-level stage and purchase a first home more akin to a move-up buyer.
John Burns Real Estate Consulting reckons that young and growing families are especially motivated to upgrade to a new home as a result of the COVID-19 pandemic. It said this segment will likely drive around 805 of new household growth in the new home market over the next few years.
For young couples, families, or individuals, the real estate data firm suggests builders pay careful attention to efficient use of square footage that keeps price points in check, and lure this segment with home offices or flexible workspaces, connections to outdoor spaces, and thoughtful inclusion of windows and decks.
Also, families will still likely desire open concept living, but may also be drawn to areas in a home where they can social distance from children, such as an upstairs loft area or a retreat in the master bedroom, Perlman and Deutch note.