Home automation, energy efficiency and an open floor plan top the wish list of Generation Y homebuyers.
Want to know what the home of the near future will look like? Just talk to a millennial.
Members of the millennial generation, or Generation Y — those born between the early 1980s and late 1990s — have entered their home-buying years and are taking the housing industry in a whole new direction. Their preferences are expected to shape the design of homes for decades to come.
“Gone is the nostalgia of having a home just like your parents or grandparents,” says Ann Rayborn, who has worked as a consultant in the Texas homebuilding industry for almost 20 years.
For today's young buyer it’s all about clean, simple lines. Homebuilders are paying attention.
“Everything needs to have a purpose,” Rayborn says. “Designs are becoming very streamlined and very efficient.”
Millennials welcome high-tech in the home
Perhaps the biggest change for homebuilders is the demand for technology from these young buyers.
Jill Waage, editorial director for home content at Better Homes and Gardens, spoke recently at a National Association of Home Builders panel where she explained that young buyers increasingly seek ways to control their heating and air-conditioning, home security and lighting systems from their phones.
That means home automation is becoming essential.
“They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door,” she says.
Technology even changes basic designs that have been in homes for years.
“There's no need for built-in bookshelves when your books are on your iPad," Rayborn says. "Why have a deep nook for a TV when they are now so light and thin that they can be hung on the wall."
Open-concept living and updated appliances are key
Investing in a home that has an open concept layout and newer appliances is also important for Generation Y homebuyers.
“Updated kitchen and appliances are a dealmaker or deal breaker,” says 28-year-old Josh Madej, who currently rents in Washington, D.C. He and his fiancee are looking to buy their first home together.
They, too, would like a high-tech home that's simply designed and extremely functional for two people with busy careers.
Functional for most Millennials starts with an open-concept floor plan, so expect to see this generation embrace the trend of disappearing formal living and dining rooms.
“Having a kitchen and living room that open up to one another giving the place a spacious look is a must,” Madej says.
A move to the suburbs
Generation Y is poised to make a significant impact on home design with their preferences for energy efficiency, smart home technology, open kitchens and casual spaces. But while many millennials are content to live in the city as renters, many more are choosing to purchase single-family homes in the suburbs.
According to the National Association of Realtors, the top reasons they're fleeing urban life are lifestyle changes, space and affordability.
“The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” says Lawrence Yun, chief economist for NAR. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out."
Millennials spent an average of $187,400 on a new home, including 7 percent as the median down payment, according to NAR. If that kind of cash eludes you, you're not alone — 23 percent of those buyers said they received the down payment funds as a gift.
- Additional reporting by Staci Giordullo
Editor's note: This is an updated version of an article originally posted on April 15, 2015.
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