The two biggest markets in home building today seem to be at opposite ends of the spectrum and desire homes that are equally as different. Who should you focus your business on? That’s what builders discussed at the recent National Association of Home Builders annual conference in Las Vegas.
The demand from Millennials came as a surprise to builders, but they’ve had their eye on the Boomers for some time. The builders association states that about one third of U.S. households are composed of the 55 or older crowd. Many 45+ aged residents still want to stay in their current homes, but builders anticipate huge growth as they come into retirement. In 15 years there will be double the amount of Americans over the age of 65 as there are now and that’s a market you can’t pass up.
As for Millennials, builders weren’t expecting this segment to grow so quickly so fast. In fact, they are the top home buying group in the nation at 36% of home purchases (Boomers follow at 34%). How can Millennials do this? They aren’t the entitled, lazy group that most people think they are. They have good, high-paying jobs and they have more money put away than their parents had at the same age.
That’s not the only thing about millennials that surprised home builders. Thought you might expect that these first-time home buyers would have more modest requests, they don’t. Millennials want big houses with all the amenities. Forget starter homes, this set are willing to wait a bit longer to get what they want the first time rather than settling for less initially like their parents did.
When the dust settles, many housing consultants are recommending builders set their sites on the Boomers. They have more financial resources and will put more money into their homes in the end. They might want less square footage than the millennials, but they will make it count.
No matter which way you look at it, the housing market will see plenty of action between these two strong-minded generations who will fuel the housing market for the next decade at least.
Source: National Association of Homebuilders