What Millennials Want in a New Home

Get ready for the next wave of home buyers — it’s going to be a whopper. The Millennials, that demographic group also known as Generation Y or the Echo Boomers, number 80.8 million, according to the U.S. Census Bureau. Accounting for immigration, the Bureau estimates that Millennials could number 92.9 million by 2025.




Millennials are challenging for home builders because they’re hard to define. The youngest are teenagers, the oldest are in their early 30s. Some want an unfettered, hip, urban lifestyle while others are looking for a more traditional home in which to raise a family. In short, there is no one buyer profile for this generation.



Take, for instance, Jerry Gloss’ children. The co-principal of KGA Studio Architects (previously known as Knudson Gloss Architects) in Louisville, Colo., has a 22-year-old and a 28-year-old. “The youngest is going, ‘Man, I’d love to live in a loft near downtown and be able to walk to the art gallery and the local beer joint,’” Gloss says. “The one who’s 28 has had a career for four or five years and is already talking about marriage and kids.”



Younger Millennials are more attracted to rental housing than for-sale housing, partly because of their youth and partly because mortgage financing is so difficult to obtain.



“Also, they’re not in a place where they should buy because most of them don’t know where they’re going to be five to seven years from now,” says John McIlwain, senior resident fellow for the Urban Land Institute in Washington, D.C.



Older Millennials (the married-with-children segment) are the most likely to buy townhomes or detached homes. However, they comprise only a small percentage of Generation Y, says market analyst Todd Zimmerman, co-managing director of Zimmerman/Volk Associates in Clinton, N.J. “The rest of the Millennials have seen their older siblings, parents, and friends burned, so the bloom is really off the rose,” Zimmerman says. “And whether they will return to homeownership in the way that predecessor generations did is anyone’s guess.”



He emphasizes that Millennials don’t want a suburban existence that makes them totally dependent on the automobile, like their Boomer parents. “Neighborhood is first — a walkable neighborhood. They will not compromise about that.” They’re also seeking authenticity, informal layouts, and space that functions well, not just square footage for its own sake. And they’re very much into cooking as entertainment (cooking outdoors is part of that trend).



But in some ways, Millennials and Baby Boomers are alike. “Boomers and Millennials are both at a life stage — empty nesters and just leaving the nest — where they value community for social and cultural interaction,” Zimmerman says. Like the Boomers did, Millennials are choosing to marry and have children late in life, though Millennials are delaying those events even longer. Rest assured, though, when this generation is ready to buy, they will have a tremendous impact on the housing market.



Practicality wins

Compared to earlier generations, older Millennials are more pragmatic about their housing needs, says Vance Graham of Bassenian Lagoni Architects, Newport Beach, Calif. “The death of the living room has pretty much been announced,” says Graham. “Everyone is moving to the great room.” There is still demand for both informal and formal dining spaces, but the formal dining room must have some flexibility. “It could turn into a den, for instance, so its position in the home needs to work in multiple fashions,” he says.



The mudroom has seen a rebirth of sorts, Graham says. “It has different personalities,” says Graham. “It can be a home management space, a storage area for bulk items, or a true mudroom — a transition from outdoor activities into the house.” Second-floor bonus rooms are also making a comeback. “In terms of square footage, it takes the place of the living room. You’ve got the great room downstairs for family gatherings and a play area for the kids upstairs,” he says. In homes that are less than 2,200 square feet, Graham says the bonus room may become an optional bedroom or game room, depending on the buyer.

by Professional Builder, March 2011
Susan Bady, Contributing Editor