Millennials Prefer Single Family Homes

Lots of articles have been written about what the ‘millennials’ are looking for in a new home, as they emerge from their parents’ spare bedroom. Spurred on by low interest rates, a better job market, and lower down payments, this 25-to-35 year old age group is slowly, but surely, embracing the idea of home ownership. Their ultimate buying power will rival that of the aging baby boomers, but the big question, in the mind of builders, is what do they want for their first home?

Although these ‘millennials’ have embraced technology and the latest gadgets, their quest and desire for home ownership is not much different than their parents. According to a recent survey by the National Association of Homebuilders (NAHB), 75% want a single family home. Only 10% would opt to live in the city center. Almost 25% would prefer a rural setting, near parks and walking trails.

NAHB also reported that for the first time, the size of the single family home decreased as millennials look for smaller, more affordable residences. So what are they asking for? As you can expect, they like electronic features such as programmable thermostats and energy-efficient appliances, and are willing to pay 2-to-3% more for an energy-efficient home as long as it saves in their utility bills. They also want laundry rooms (not closets), bigger garages, pantries, linen closets and will accept an unfinished area, particularly if it is a daylight or walk-out basement. They are willing to commute farther out from their employment centers in order to obtain their housing objective.

They also don’t want cheap when it comes to finishes, i.e. granite or quartz for countertops and a neutral pallet of white, cream and taupe with a splash of color here and there that can be easily changed out. They like the latest pantone color of the year (marsala) and a bright front door. They’ll gladly go over their lighting allowance for some drama in their light fixtures, as it visually helps define their personal taste.

These requirements are all relatively expensive, particularly in Anchorage, where garages must be heated and all building products imported, making the only option a smaller lot and a smaller, energy efficient home. For energy efficiency, Alaska is on the right track. As of July 2014, all new homes must be built to five star standards in order to qualify for AHFC financing.