Millennials are driving sales of new homes

Reports that millennials may prefer the transient nature of renting appear to be overstated

By Steve Randall

04 Apr 2018

Reports that millennials may prefer the transient nature of renting appear to be overstated.

Young Americans are buying homes and are driving the growth of newly built properties according to the National Home Builders Association; and it’s not all about urban living either.

Millennials accounted for 36% of all buyers of new homes in 2017 and posted the largest gain among demographic groups. With 70 million millennials in the US, it offers a positive outlook for the market.

“Millennials are recognizing the benefits of homeownership and are eager to buy their first homes,” said National Association of Home Builders (NAHB) Chairman Randy Noel, a custom home builder from LaPlace, La. “And contrary to conventional wisdom, this generation is in the market for single-family homes in the suburbs as they look ahead to raising their families.”

Too few lots, townhouses come to the rescue

Builders acknowledge the demand for providing more single-family detached homes that are affordable to first-time buyers while remaining cost effective for builders, NAHB says. However, the lack of available lots, and the rising cost of construction challenges their ability to meet the demand.

One solution is building townhouses which offer a more affordable solution. The share of these homes had been falling since the recession but was up 7% in 2017.