Home Trends & Buyer Preferences JANUARY 23, 2013 // 8:30 - PowerPoint PPT Presentation

Home Trends & Buyer Preferences JANUARY 23, 2013 // 8:30 – 10:00 AM] Presenter(s ): Rose Quint // NAHB, Washington, DC

Home Trends & Buyer Preferences Based on the results of new surveys by NAHB and Better Homes and Gardens, this session will describe the latest home buyer preferences for the design, features and technologies of new homes. You'll learn valuable insights about the shape of new home demand, and also get useful leads on the features and amenities that will deliver the best possible housing products moving forward.

Learning Outcomes • Identify the top ten features most wanted by home buyers • Identify the characteristics that most influence the home purchase decision • Understand how potential home buyers trade off the size of new homes with the combination of high-quality products and amenities

NAHB • Changes in Population and Households • Characteristics of New Homes Built in 2012 • What Home Buyers Really Want

Changes in Population and Households

Households (HH) by Type (As % of Households) 100% • Married couples‟ % Unrelated Adults continues to fall: Other Families 71% in 1970 80% 49% in 2012 Living Alone 60% • While other HH types gain share – 40% Married Couple Families Living alone: 17% in 1970 20% 27% in 2012 0% 1970 1980 1990 2000 08 09 10 11 12 Source: U.S. Census Bureau, Current Population Survey.

Households by Race/Ethnicity (As % of Households) 120% • In 2012: 80% White Asian 100% 13% Black Hispanic* 4% Asian Black 12% Hispanic 80% White 60% • In 2000: 84% White 40% 12% Black 3% Asian 20% 9% Hispanic 0% 2000 02 04 06 08 10 12 * Hispanics can be of any race. Source: U.S. Census Bureau, Current Population Survey.

Households by Tenure (As % of Households) 70% 41% • Owner share has Owners 69% 39% (Left axis) fallen: 68% 69% in 2005 37% 65% in 2012 67% 35% 66% 65% 33% • While Renter share has increased: 64% 31% 31% in 2005 Renters 63% 35% in 2012 29% (Right Axis) 62% 27% 61% 60% 25% 2000 2002 2004 2006 2008 2010 2012 Source: U.S. Census Bureau, Current Population Survey.

Householders by Gender (As a % of Households) 35% Female • In 2012: 30% Women headed 30% of HH Men headed 21% 25% (Married couples 49%) 20% Male 15% • In 1970: Women headed 21% of HH 10% Men headed 8% 5% (Married couples 71%) 0% 70 80 90 00 01 02 03 04 05 06 07 08 09 10 11 12 Source: U.S. Census Bureau, Current Population Survey.

“Never Married” Share of Population (Percent of people 15 or older) 36% • Share of Population > 15 34% Male who have never married in 32% 2012: Overall Male: 34% 30% Female: 28% 28% Overall: 31% 26% Female 24% • In 1970: 22% Male: 28% Female: 22% 20% Overall: 25% 70 80 90 00 01 02 03 04 05 06 07 08 09 10 11 12 Source: U.S. Census Bureau, Current Population Survey.

Adults 25-34 Living with Parent(s) 4 19% Male • In 2012: (left axis) 17% Male: 3.5 million Female: 2.2 million Share of 3 15% Age Group Millions • In all, 14% of age group 13% 11% • In 2000: 2 Male: 2.4 million 9% Female: 1.6 million Female 7% (left axis) • In all, 11% of age group 1 5% 00 01 02 03 04 05 06 07 08 09 10 11 12 Source: U.S. Census Bureau, Current Population Survey.

Multigenerational Households (In Millions) • Yes, there was a 30% increase 5.1 between 2000 and 2010, but still a small share of total households – 3.9 about 4%. • Three types of MG households: 66%: Householder + child + grandchild 33%: Householder + parent + child 1%: Householder + parent + child +grandchild 2000 2010 Source: U.S. Census Bureau, Decennial Census.

Characteristics of New Homes Built in 2012

Average Size of New Single-Family Homes Started (Square Feet) 2,700 • Average home size 2,524 2,499 2,500 continues to rise –up to 2,524 sq. ft. in 2012. 2,300 2,362 2,100 1,900 1,700 1,500 2000 01 02 03 04 05 06 07 08 09 10 11 12 Note: Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes with 4+ Bedrooms (% of single-family homes started) 45 42% • Share with 4+ 39% 40 bedrooms continues to grow. 35 30 34% 25 • From 34% in „09, to: 20 36% in „10 40% in „1 1 15 42% in „12 10 5 0 2000 01 02 03 04 05 06 07 08 09 10 11 12 * Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes with 3+ Full Bathrooms (% of single-family homes started) 35 • Share of new homes 29% 30 started with 3+ full baths 27% has increased 2 years in 25 a row. 20 23% • From 23% in „10, to: 15 28% in „1 1 10 29% in „12 5 0 2000 01 02 03 04 05 06 07 08 09 10 11 12 * Data for 2012 includes only first half of the year . Source: U.S. Census Bureau.

Homes with 3+ Car Garage (% of single-family homes started) 30 • Share with 3+ car 25 garage also continues to increase. 20% 20 19% • From 16% in „10, to: 15 16% 18% in „1 1 19% in „12 10 5 0 2000 01 02 03 04 05 06 07 08 09 10 11 12 * Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes with 2-Stories (% of single-family homes started) 70 • Share with 2-Stories 57% 60 57% keeps rising as well. 50 51% • From 51% in „09, to: 40 53% in „10 54% in „1 1 30 57% in „12 20 10 0 2000 01 02 03 04 05 06 07 08 09 10 11 12 * Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Average Sales Price of Homes Started For-Sale (% of single-family homes started) $350 $305 • And the average sales $279 $300 price (of homes started for sale) rose to $279,000 $250 in 2012. $248 $200 • That is three years of $150 consecutive increases, $100 since bottoming at $248,000 in 2009. $50 $0 2000 01 02 03 04 05 06 07 08 09 10 11 12 * Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes Started in 2012 were once again . . . • More likely to have 4+ bedrooms • More likely to have 3+ full bathrooms } WHY? • More likely to have a 3+ car garage • More likely to be 2-Stories • On average, more square footage • On average, more expensive

Why Did Homes Get Bigger in 2012? • Mortgage lending remains difficult for buyers without: • 20% down payment • Excellent credit score • Verifiable employment & income • As a result, many (less financially solid) buyers remain shut out of the new home market. • And so characteristics of homes started in 2012 reflect preferences of those who could access credit, i.e., wealthier, better-off buyers.

What Home Buyers Really Want • Survey of 3,682 home buyers • Conducted in Summer 2012 • Representative of all home buyers

Home Size (Median Square Feet) 2,226 • Home buyers want a median of 2,226 square feet in their next home. • 17% larger than their current home. 1,906 • But 13% smaller than homes started in 2012. Currently Have Would Like to Have Source: NAHB, 2012 What Home Buyers Really Want.

Most Want Kitchen Open to the Family Room (% of Respondents) Open, completely or 74% • 37% prefer a completely with half wall open arrangement, up from 29% in 2004. Completely separate areas of 13% house • Preference for open kitchen/FR increases as the Side-by-side, with 7% price buyer expects to pay full wall rises. Oversized kitchen 6% and no family room Source: NAHB, 2012 What Home Buyers Really Want.

Most Buyers Want 3 or 4 Bedrooms (% of Respondents) • The presence of children has big impact 47% on this preference. 79% 32% • 57% of married couples with children want 4+ bedrooms. 13% 8% • Compared to only 25% of those married 0% without children. One Two Three Four Five or more Source: NAHB, 2012 What Home Buyers Really Want.

2 ½ Baths Are Enough for Most Buyers (% of Respondents) • Number of bathrooms 35% desired is positively 30% related to household income. • 3 ½ or more baths are 13% 11% wanted by: 10% 5% with inc. < $50k 26% with inc. $150k+ Up to 1½ 2 2½ 3 3½ or more Source: NAHB, 2012 What Home Buyers Really Want.

Most Want Ceilings 9‟+ in First Floor (% of Respondents) • Preference for high ceilings in 1 st floor 8 Feet 34% continues to increase: 54% in 2004 64% in 2007 65% in 2012 9 Feet or more 65% Source: NAHB, 2012 What Home Buyers Really Want.

Characteristics that Most Influence Home Purchase (% of Respondents) • For 65% of buyers, Living Space and number appropriate living space of rooms to meet your 65% ranks as the most influential needs characteristic. Energy efficient features 39% • Energy efficiency and a well-insulated home are next most influential. Better insulated and 35% sealed home • Followed by proximity to Proximity of the desired locations (work, community to locations 33% shopping). you want to go Source: NAHB, 2012 What Home Buyers Really Want.

Willing to Buy a Home Without a Living Room? (% of Respondents) • Still, no majority No, opinion on the living 41% room. • 1 out of 5 can be persuaded either way. Yes, 37% • Willingness to buy without a LR increases Not sure, with household 21% income. Source: NAHB, 2012 What Home Buyers Really Want.