A recent survey of 503 Millennials (people ages 25 to 34 including 203 current homeowners and 300 individuals who plan to buy a house within 12 months) reveals that Millennial home buyers are interested in maximizing space and affordability while maintaining a level of community found in urban environments, and capitalizing on opportunities to customize and personalize their homes.
More than half of survey respondents (53%) are eager for a suburban lifestyle, and millennials are four times more likely to opt for more space over living in a populated community. However, urban benefits of being within walking distance to parks, grocery stores, schools, and work were high priorities for respondents.
Millennials named “desire to have outdoor space” the most important reason to purchase a home – more important than both financial and emotional readiness for homeownership.
Millennial homeowners are mostly focusing on purchasing a home as their primary residence. But millennials are a demographic that’s dealing with more diverse living situations than previous generations. While many millennials will choose to start families, we also know from Census data that single-adult households are on the rise. Meanwhile, millennials’ retiring parents could add another twist to the question of household composition—especially if those grandchildren come along. So, millennials are looking for flexible living spaces, and 71% say the ability to customize a new home is somewhat or very important. Nearly 4 out of 5 respondents (78%) said a children’s play space was important or a must-have in their home design, and 74% said the same when asked about having a separate living suite. Other flex spaces, including finished basements and office areas, also ranked high in importance, but more respondents were willing to compromise on those spaces.
A full 75% of respondents said they’re looking to purchase a home because they’re tired of renting, and 84% said they feel “financially ready” to purchase a home. The same amount said they’re interesting building personal financial equity through a home purchase. In order to achieve the level of flexibility and location amenities they’re looking for, millennial home buyers plan to spend about a fifth of their budgets on renovations and customizations.
Are you a Millennial considering buying a house? What are your priorities?
Realtor.com’s Chief Economist, Jonathan Smoke
But buying a home costs money – the down payment, the monthly mortgage payment, the taxes, the insurance, and the maintenance. It enough to make you put off the house hunt and sign that yearlong lease with your landlord even though he upped your rent 25% and will likely do the same next year. But even with all of those costs, you still stand to save more than $200,000 over the next 30 years if you buy right now.
At a national level, the 30-year financial benefit of owning today is $217,726. Conversely, there is a financial penalty—for every single day you pay your landlord instead of your mortgage company. Waiting just one year and and you’re losing out on an estimated $18,672 in savings. Delay for three years, and that figure jumps to $54,879.
The penalties are so high because mortgage rates are forecast to increase and because home prices are rising quickly. The economist figures don’t take into account the qualitative advantages of home ownership which many potential home buyers would argue are equally, if not more, important when deciding whether to take the plunge – advantages such as more control over your living situation, flexibility with pets, and, generally, more options
“We’re at a critical juncture: Rents, home prices, and mortgage rates are all expected to rise significantly over the next several years,” Smoke says. “That means the cost of delaying homeownership will go up even more sharply, if you wait three years or even one. It’s much like the decision to start contributing to a 401(k). Delay contributing, and you lose out on the compounding returns.”
Smoke and his team even stacked the deck against owning. For instance, they assumed that any money saved by renters would be invested, and that the investment would enjoy a compound annual growth rate of 5% – consistent with conservative long-term expected market returns. But how many renters are actually saving and investing?
Nationally, it’s currently cheaper to buy than to rent, home prices are expected to appreciate, and, while renting is subject to inflation, homeownership costs are locked.
Strong economic drivers such as job growth, population growth, and household growth in your local market cause both rent and home prices to skyrocket driving the savings even higher.
In order to realize a positive financial benefit from buying a house, owners have to wait for “break-even time periods”—when the transaction costs of buying and selling cancel out. Nationally, that wait time is just over three years.
Smoke says: Nearly 90% of the markets (335 of ‘em) produce a financial benefit of at least $100,000 from owning over 30 years. In addition, almost a quarter of the nation’s markets reap a financial return greater than the national average.
Prices of newly built homes are on the rise again, illustrating that home builders are grappling with the same supply-and-demand problems bedeviling the existing home market.
New-home prices, which appeared to lose momentum over the past year, actually have caught a second wind of late.
New Commerce Department figures show that, after four consecutive months of slight declines, the median price of a newly built home in the U.S. rebounded by 4.1% in April to $297,300. That puts it back within striking distance of the all-time high of $302,700 set last November.
Some economists say demand simply is exceeding the pace at which builders can construct homes. Builders have started construction of 7.6% more single-family homes in the first four months of this year than at the same time last year, according to Commerce Department data, but they’ve sold 23.7% more than a year ago.
Some of those homes sold so far this year are speculative homes built at the end of last year. But others just haven’t gone under construction yet. Once builders get threatened with falling behind schedule, many opt to raise prices in a bid to temper demand.
“There just aren’t a lot of homes out there for sale,” said Mark Zandi, chief economist for Moody’s Analytics. “The market looks like it’s going to get even tighter because the level of construction remains very low compared to improving demand. I sense that, until builders can start ramping things up more significantly, pricing is going to be strong.”
In the resale market, the inventory level had held at about 4.6 months in the first quarter before rising to 5.3 months in April, meaning it would take that long at the current selling pace to burn through the available inventory of existing homes for sale. A balanced market, in which buyers and sellers are on roughly equal footing, is typically 6 to 7 months of supply.
Tight inventory in the resale market has resulted in prices close to the all-time high set nine years ago. In April, the median resale price reached $219,400, up 8.9% from April 2014. That increase likely will help to create more supply by pushing up home values and thus fattening homeowners’ equity cushions. However, the downside is that it makes buying a home more expensive, especially for first-time and entry-level buyers.
According to remodelers polled in National Association of Home Builder’s Remodeling Market Index (RMI), the number one reason customers remodeled their homes in 2014 was a “desire for better/newer amenities.” On a scale of 1 to 5 (where 1 indicates never or almost never, and 5 is very often), the average rating on desire for newer amenities was 4.4 in 2014.
In second place with an average rating of 4.2 was a “Need to repair/replace old components”. A “desire for more space,” another fairly traditional reason, came in third with an average rating of 3.8; “To avoid moving or buying another home” was fourth at 3.3.
Desire to be able to age in place” (3.0), “increasing the value of the home as an investment” (2.8), and “energy efficiency/environmental concerns” (2.6) while significant factors in the remodeling market, were less powerful than the simple desire for new things and need to replace old things.
Do you fall into any of these categories? If so, Chuck Miller Construction Inc. can assist you. Contact us at (208) 229-2553 or by email to email@example.com
Gwen and Ryan Clark need more living space for entertaining and for out-of-town guests. But they loved living in Hidden Springs and did not want to move. They even considering buying another home in Hidden Springs but that would mean they would have to sell their existing home. Then they heard about the attic transformation we did for Dave and Shelley Baldiga and called us.
Our 2003 Parade of Homes entry – a 2,499 square foot 3 Bedroom 2 1/2 Bath home includes a 428 square foot Bonus Room – affectionately referred to as the “Pumpkin” house by residents of our community.
This two-story charming Craftsman styled home is an incredible floor plan. Like all of Chuck Miller Construction’s homes, this home was designed and built following the Building America Systems Engineering Approach to Home Building. That means it will use 30 50% less energy for heating and cooling.
The base plan is 2,071 square feet with 3 bedrooms and 2 1/2 baths. The kitchen has an angular island that doubles as a snack bar. The breakfast nook is enclosed by windows, making meals feel alfresco. The open concept kitchen, nook, great room, and the dining room defined by impressive columns and beams offer ample space for quiet evenings at home or entertaining friends.
The private study is furnished with an optional built-in desk. Upstairs, the master suite features a compartmentalized bath with an elegant tub and separate shower. The optional 422 square foot Bonus Room above the garage is perfect for a studio, playroom, or even another bedroom and bath. The two-car garage offers an area at the back for storage of a third car, bikes, mower, and sports equipment
The Fanter’s have lived in their home since 2000. It was Hidden Springs Building Company’s Parade Home that year.
The countertops and backsplash were dark brown granite tile which was extremely popular in 2000. The Kitchen featured a large island – approximately 7′ x 7′. It was fine while the Fanter kid’s were small. But it became a problem as they got older. See why and how we solved the problem. — at Hidden Springs.
Here are the before and after images.
Looking for a way to make a new or existing home fit a disabled veteran or service member’s needs? The solution might be a Specially Adapted Housing grant from the U.S. Department of Veterans Affairs (VA). The VA’s Specially Adapted Housing (SAH) program provides assistance for construction or remodeling of an accessible home for those veterans who live with serious service-connected disabilities.
NAHB has long supported the VA’s Specially Adapted Housing program. There are two types of grants administered by VA, which are available to assist severely disabled veterans or service members in adapting housing to their special needs. More information about this grant program is available through the VA’s Specially Adapted Housing program Web site
If you need more information and would like to talk with a Specially Adapted Housing agent, contact
VA Regional Office (262)
805 W. Franklin St.
Boise, ID 83702
Fax: (208) 334-1902
Specially Adapted Housing Fact Sheet
download “Specially Adapted Housing Fact Sheet”
This fact sheet provides information on the Specially Adapted Housing Grant (SAH)
Special Housing Adaptation Fact Sheet
download “Special Housing Adaptation Fact Sheet”
This fact sheet provides information on the Special Housing Adaptation Grant (SHA) programs.
VA Form 26-4555
download “VA Form 26-4555”
Veteran’s Application in Acquiring Specially Adapted Housing or Special Home Adaptation Grant. Complete the form and submit it to your nearest
Handbook for Design: Specially Adapted Housing
download “Handbook for Design: Specially Adapted Housing”
Handbook for Design: Specially Adapted Housing
Consumers who install solar energy systems, small wind systems, and/or geothermal heat pumps can receive a 30% tax credit for systems placed in service before December 31, 2016; there is no upper limit.
Solar Panels (Photovoltaic Systems) – Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.
Solar Water Heaters – At least half of the energy generated by the “qualifying property” must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
Note: The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling.
Tax Credit includes installation costs.
Small Wind Turbines (Residential) – Must have a nameplate capacity of no more than 100 kilowatts.
Tax Credit includes installation costs.
Geothermal Heat Pumps Geothermal heat pumps are similar to ordinary heat pumps, but use the ground instead of outside air to provide heating, air conditioning and, in most cases, hot water. Because they use the earth’s natural heat, they are among the most efficient and comfortable heating and cooling technologies currently available.
Systems must meet the following requirements:
EER = 14.1
COP = 3.3
EER = 16.2
COP = 3.6
EER = 15
COP = 3.5
Tax Credit includes installation costs.