Millennials are going to be a big force in the housing industry in the years to come, but for homebuilders, they may be trouble.
The Wall Street Journal reported that homebuilders should be worried about millennials’ impact to their bottom line.
This generation tends to have a personal taste for urban living. The cohort is financially strapped, specifically student loan debt that will likely prevent its members from taking on a hefty mortgage. What’s more, they don’t show a high desire for living in suburbia, where many builders are centering their projects.
One in five people in their 20s and early 30s are currently living with their parents, and about 60 percent of young adults report receiving financial support from their parents, The New York Times reported. That’s a big difference from a generation ago when only one in 10 young adults moved in with their parents and few reported receiving financial support.
Some builders have responded by starting projects that are more walkable, reflecting millennial tastes. Millennials have said they prefer smaller, functional homes. They also are not interested in “cookie-cutter” homes that look like all the others on the block, according to surveys conducted by Better Homes and Gardens of 1,000 adults aged 18 to 35.
The nation’s largest homebuilder, D.R. Horton, recently announced that it was going to reach out to the entry-level market by offering a new brand, Express Homes, with properties priced between $120,000 and $150,000.