The homebuyer narrative is undergoing a profound shift, and at the forefront are millennials. This generation is redefining the concept of homeownership, showing a clear disinterest in the conventional ‘starter home.’
They have been looking for a ‘forever home’ from day one, a home that mirrors their values, lifestyle, and aspirations for the future. This shift is not just a trend but a significant evolution in the housing market that builders need to adapt to.
Who are Millennials?
Millennials, born between 1981 and 1996, are the largest cohort of homebuyers, and this trend is continuing to grow.
According to the National Association of Realtors, this generation makes up 38% of all homebuyers.
The oldest millennials, born between 1981 and 1996, are 32-41 years old and make up 21% of buyers, while the youngest millennials, born between 1997 and 2000, are 25-28 years old and make up 17% of buyers.
Despite their significant presence in the market, millennials are grappling with numerous obstacles on their path to homeownership.
Escalating mortgage rates, soaring prices, and a scarcity of available properties are all formidable barriers they must overcome. Understanding these challenges is crucial for builders to effectively cater to this demographic.
A Bankrate survey revealed:
- 37% of millennials believe it’s a bad time to buy a home.
- 67% aren’t saving for a down payment.
These hurdles have made millennials more discerning, and they’re not interested in settling for a starter home.
What Millennials Want In a Home
Millennials are getting their first home later in life. They’ve got student loans to deal with and are focused on establishing their careers before investing in a home. When they do buy, they want homes that fit their lifestyle and needs.
Here’s what matters most to them:
- Location: The advantages of having a short commute and being close to entertainment, shopping, and community amenities outweigh the disadvantages of living in a large home.
- Flexibility: Millennials are most attracted to homes with layouts that adapt to their changing needs. They want more space, multi-functional spaces, and the ability to rent to others. ADUs and duplexes fit the bill perfectly.
- Sustainability: These homeowners in training adore green building features, eco-friendly materials, and smart home technology.
- Design: Millennials care most about design—homes can be small and perfect if they’re well-designed and intentional. They like quality, not quantity.
3 Reasons Why It’s Time to Retire the Starter Home
The classic starter home—a small single-family home in the suburbs—isn’t relevant to millennials.
Here’s why:
- Millennials are so done with “temporary” homes. They’re ready to settle into a home that will fulfill their dreams for years to come.
- Generic homes are not an option. Millennials need unique spaces with thoughtful details to fit their lifestyle.
- Millennials want vibrant neighborhoods with shopping, dining, and entertainment within walking distance. Suburban sprawl is a definite no-go.
It’s Time to Innovate
To reach millennials, we need to rethink our approach to homebuilding.
Here’s how:
- Downsize & Pivot: Focus on quality over quantity. Multi-functional spaces and clever design can make a smaller home feel perfect.
- Build Missing Middle Housing: Duplexes, triplexes, and ADUs can provide flexible housing options and a sense of community.
- Location, Location, Location: Resources should be focused on building homes near town centers and walkable neighborhoods.
- Thoughtful Design: Millennials appreciate simplicity. Clean lines, natural materials, and thoughtful details make homes more appealing.
The Future is Now
Millennials are the current and future homebuyers, and they’re helping to shape a brighter housing market. Their desire for intentional homes is a perfect opportunity for builders to shine. By embracing the shift away from generic housing, we can create homes that are genuinely relevant for today’s buyers.
At Allison Ramsey Architects, we believe in designing homes that are relevant for today’s buyers while anticipating the needs of tomorrow’s homeowners.
Let’s work together to create spaces that not only meet the moment but inspire a legacy of thoughtful, meaningful living.
