How Millennials are Impacting Builders
It has been quite the trend lately – how millennials impact the real estate industry and home sales. But it looks like their habits are also impacting builders. Ever since the housing crisis, it has been debated about whether or not millennials will make the jump into homebuying – and there are signs that more and more will do that soon.
A new report from the Wall Street Journal found that homebuilders are actually building more homes in general now than they have before, but there is a distinct difference in the types of homes that are built. Instead of family homes, more builders are constructing lower-priced, smaller homes than before. This is because fewer millennials plan on having families for the foreseeable future, and they are buying homes to reflect that.
Per that report, the Census Bureau reported that the average home built in 2016 was 2,634 square feet, a downsize from previous years. Since 2009, there was a trend that homes were getting bigger and bigger, but it doesn’t look like that trend will continue.
Builders are confident that the housing market is solidifying, though it is doing it in a different way than we maybe expected. It is important to note that materials and building costs continue to rise. Another important thing to think about for builders is that some millennials are trending toward older homes that need to be fixed up rather than newer homes that cost more.
Still, it is obvious that even if they don’t have the means right now, most millennials are on track to own homes within the next few years. More and more older millennials are making it happen and it doesn’t seem like younger millennials are that far behind. Of course, this is something that we will have to gauge as the years go by, as homes do take some time to build.
As we recently reported, the number of homes on the market has fallen and that number will continue to fall for a few months. This means that now is really the time to invest in real estate and if you are debating listing a home, now might be the best time to do it. Whether you have a starter home, a flip, or something else, your home will likely get more attention now that it would have in the past. This is especially true for homes that are in that median price range or even starter homes that you have grown out of.
It looks like we are reaching a leveling off of sorts in the real estate industry. We often cite student loans as a reason why millennials aren’t buying homes, but with the stock market performing steadily, it is hopeful that they will start to face economic success as well. Builders are also more invested in building homes that people really want – not just building homes to build homes.