Buying your first home is an exciting, albeit stressful, experience. From choosing the right location, to deciding on a size and design to fit your dreams, there’s a lot that goes into finding that first – and sometimes forever – home.
But as the headlines suggest, the process looks very different depending on the age of the buyers. While much of the talk about millennials and real estate points fingers at the generation for “killing” the housing market (1), they are actually the ones rocking it (2). Not only are they abandoning starter homes and buying their dream homes once they are financially ready, but the homes they are looking for also look remarkably different from their predecessors (3).
The generational shift has certainly changed what the picture-perfect starter and dream home looks like, but gender also plays a role in what first-time home buyers are looking for. A recent study by insurance specialist CloverRed set out to find out what features and amenities matter most to first-time home buyers and how these attributes differ across generations and genders .
size matters
Despite the many headlines going after Millennials’ modest, tiny homes (4), CloveRed’s study found that Millennials’ dream homes were larger than those of Baby Boomers and Gen X-ers — both in square footage and in bedrooms and bathrooms. in numbers. While Baby Boomers dreamed of a home under 3,000 square feet, Gen Xers thought 3,311 square feet was ideal, while Millennials pushed the size up to 3,320 square feet. Along the same lines, dream homes for the oldest generation averaged 3.7 bedrooms and 3.1 bathrooms, while the ideal number of beds and baths for Millennials was 4.2 and 3.3, respectively.
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However, when designing the perfect starter home rather than a dream home, all generations lean toward smaller sizes. This time, the ideal size was just 1,442 sq ft for Baby Boomers, 1,582 sq ft for Gen X-ers and 1,726 sq ft for Millennials. Homeowners also needed fewer bedrooms and bathrooms, with Gen X-ers and Millennials agreeing that 2.8 bedrooms was ideal.
Right area and facilities
Finding a home with the right square footage and number of bedrooms and bathrooms can be a step in the right direction, but it doesn’t mean anything when the location isn’t right. Choosing a “good” location means something different to everyone, but according to the study, most men and women said the area’s affordability was the most important thing (5).
Low crime rates and proximity to workplace were also among the top factors, with women more likely to consider both. Men, on the other hand, were more likely to take into account the climate and geography of the region.
The most important amenities also differed between genders—while central air conditioning, a private backyard, storage, and lots of natural light topped the list, women were more likely than men to name them important. In fact, the only amenities men wanted more than women were granite countertops, outdoor balconies, smart home technology and a wide front door.
However, when it comes to naming the most important features for a Dream Homes, a walk-in closet in the master bedroom and a separate laundry room rounded out the top five and a larger garage increased men’s interest (from just 15 percent in a starter home to 56 percent in a dream home) .
Connected: The American Dream: How Has the Definition Changed Over the Years?
dreams do come true… finally
Millennials may desire a larger home than previous generations, and women may be after a longer list of amenities, but these ideal starter homes are not out of reach. In 2017, the average single-family home was 2,660 square feet (6)—much larger than the ideal home size for all generations of starters. But rising home prices coupled with rising inflation and wage growth mean that both dream homes and starter homes are out of reach (7).
Unless home prices start to normalize, potential homeowners are forced to tick off their wish lists and settle for a more affordable home.
sources say
- https://www.forbes.com/sites/neilhowe/2018/08/27/are-millennials-killing-the-us-housing-market/#762ef5ea1ead
- https://www.forbes.com/sites/megangorman/2019/08/31/how-millennials-are-revolutionizing-the-home-buying-process/#76ad7ff92a02
- https://www.usatoday.com/story/money/2018/05/07/millennials-buying-first-home-skip-starter-house-buy-dream/582309002/
- https://www.businessinsider.com/millennials-vs-baby-boomers-big-houses-real-estate-market-problems-2019-3
- https://www.investopedia.com/financial-edge/0410/the-5-factors-of-a-good-location.aspx
- https://www.statista.com/statistics/529371/floor-area-size-new-single-family-homes-usa/
- https://www.cnbc.com/2018/06/06/us-house-prices-are-going-to-rise-at-twice-the-speed-of-inflation-and-pay-reuters-poll. HTML
What trends have you noticed that young buyers or renters are looking for? Are you doing anything to accommodate their needs and wants?
Let’s talk in the comments section.
Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
