Home Trends & Millennials’ Home Preferences JANUARY 21, 2015 || 8:00 – 9:00 AM Presenter: Rose Quint || NAHB Economics, Washington, DC

1.Characteristics of New Homes Built in Characteristics of New Homes Coming in What Millennial Home Buyers Want

Characteristics of New Homes Built in 2014

Source: U.S. Census Bureau. Note: Data for 2014 is based on the first two quarters. Average Size of New Single-Family Homes Started (Square Feet) After rising for 4 consecutive years, home size began to recede in 2014.

Homes with 4+ Bedrooms (% of single-family homes started) Share of new homes with 4+ bedrooms: About even from 2013 to % to 47%

Homes with 3+ Full Bathrooms (% of single-family homes started) Share of new homes with 3+ full bathrooms: About even from 2013 to % to 36%

Homes with 3+ Car Garage (% of single-family homes started) Share of new homes with 3+ car garage: About even from 2013 to % to 23%

Homes with 2+Stories (% of single-family homes started) Share of new homes with 2+stories: Even from 2013 to 2014 at 58%

What Will Happen to Home Size in 2015? Average will likely continue to recede WHY? 3M jobs created in 2014 – most since 1999 New rules to loosen credit tightness Moderate home price growth in 2014 Will allow more people (young, 1 st -time buyers) to enter market. They will demand smaller, more affordable homes.

Characteristics of New Homes Coming in 2015 (Based on a survey of builders nationwide in December ‘14)

10 MOST LIKELY Features in Typical Single-family Home in 2015 (1=Not at all likely, 5=very likely; avg. rating)

10 LEAST LIKELY Features in Typical Single-family Home in 2015 (1=Not at all likely, 5=very likely; avg. rating)

What Millennial/Gen Y Home Buyers Want

Type of Home Wanted Single-family: 75%Townhouse: 11% Multifamily Apartment: 4% Manufactured Home: 3%

Type of Area Preferred 15 Suburbs: 66% Central City: 10% Rural: 24%

Home Size (Median Square Feet) Millennials want 43% more space than they have now.

Willing to Accept to Make Home Affordable (% of Gen Y Respondents)

Most Want Kitchen Open to the Family Room, and.. (% of Gen Y Respondents) A Two-Story Home

Most Millennials Want 3 or 4 Bedrooms (% of Gen Y Respondents)

2 ½ Baths Are Enough for Most Gen Y Buyers (% of Gen Y Respondents)

The Most Wanted List (% of Gen Y Respondents)

Most “Unwanted” List (% of Gen Y Respondents Rating “Do Not Want”)

Most Millennials Will Pay 2%-3% more for Energy Efficient Home (% of Gen Y Respondents)

Most Would Be Seriously Influenced to Move to a Community if It Had… (% of Gen Y Respondents)

Rose Quint ASVP Research NAHB Economics th Street NW Washington, DC Speaker Contacts: Head Shot