More than a third (36 percent) of millennials are now in favor of a larger home, indicating the COVID-19 pandemic changed their housing preferences.
According to the Census Quarterly Starts and Completions by Purpose and Design and National Association of Home Builders analysis, the median size of new single-family homes in 2021 was 10 percent higher since the Great Recession (2009) at 2,303 square feet. The shift aligns with NAHB’s home buyers’ preferences analysis, which shows millennials and Gen Xers prefer more bedrooms and are also interested in exercise rooms and home offices.
“The home building industry expects to see home sizes continue to increase due to a shift in consumer preferences as more activities are taking place in the home in the post-pandemic environment,” says Jerry Konter, NAHB chairman. “Builders are trying to keep up with demand, but higher construction costs are hindering housing affordability.”
NAHB’s fourth quarter 2021 Housing Trends Report revealed that buyer availability expectations worsened throughout the year across all generations. Only 34 percent of millennials expected that finding a home would be easier in the months ahead and a majority (67 percent) of active buyers are spending more than three months looking for a home.
According to recent data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, the median new homes sales price in February was $400,600, up 10.6 percent compared to a year ago. New home prices have increased as building materials and other development costs have climbed due to supply-chain issues and elevated inflation pressures. In addition to construction cost challenges, higher mortgage rates in 2022 will further reduce housing affordability conditions, says NAHB.
NAHB is calling on policymakers to seek immediate remedies to the lumber and building materials supply chain bottlenecks that will increase production and lower construction costs.
