What Do Today's Homebuyers Want?
on Friday, July 9, 2021
TLDR: Most buyers want large, newly built homes in suburban areas.
The COVID-19 pandemic changed nearly every facet of our lives. And as our daily routines morphed, so did what we need from our homes. Our houses became offices, classrooms, gyms, and entertainment centers. In fact, the housing market was a prime driver behind the country’s economic recovery, with buyers looking for bigger homes on more land and consequently spending more money.
While many of us have been able to return to a semblance of normalcy in our day-to-day lives, a survey released in February 2021 by the National Association of Home Builders (NAHB) found that the wants and needs of today’s homebuyers are reflecting some of the lessons we learned about ourselves during months of lockdown. Let’s take a look at what homebuyers want now.
The Majority of Buyers Want a New Home
Newly constructed homes have widened the gap in popularity over existing homes, partially since they can be built with highly desirable features in place and require little to no updates. In addition, low inventory of existing homes and the fact that new homes are more likely to be built in the suburbs, which are seeing an influx of new residents, is driving their popularity.
New Construction vs. Existing Home Preferences
| ||2003 ||2007 ||2012 ||2015 ||2018 ||2020 |
|Existing Home ||29% ||37% ||45% ||44% ||46% ||39% |
|New Home ||71% ||63% ||55% ||57% ||54% ||60% |
60% of buyers want a newly built home — largest share since 2007
- 68% of Gen X buyers
- 65% of Millennials
- 55% of Baby Boomers
The Cost of New Construction
While the desire for new homes is growing, they are also becoming increasingly expensive. Lumber prices are skyrocketing at an unsustainable pace, adding nearly $36,000 to the price of a new, single-family home, according to NAHB. If a new home is on your wish list, know that if you build now, you’ll be paying a premium.
We thought we’d seen the death of the open layout as privacy became a hot commodity over the past year-plus, but that may not be the case. An open arrangement between the kitchen and the dining room sounds good to 85% of respondents, while 79% want an open kitchen and family room area, and 70% want the dining and the family room joined into one big room.
- 67% of homebuyers want a single-family detached home
- First-floor amenities are in demand
- Washer and dryer (63%)
- Full bath (80%)
- Hardwood floors in the main living area (81%)
We learned that bigger is often much better, especially if you have both WFH adults and distance-learning kids in the household: 35% of these recent and prospective homebuyers want a larger home.
In the NAHB survey, nearly a quarter of buyers noted that they now want a bigger home precisely because of the impact of COVID. It’s interesting to ponder whether the median desired home size would have been smaller without that impetus.
- Median square footage desired: 2,022
- 46% of new and prospective buyers want three bedrooms
- Most people want two bathrooms or more
Location, Location, Location
Bigger homes need more land to build on, and the suburbs offer that option. That’s likely a major reason why 30% of post-COVID buyers want to move to the outlying suburbs, vs. 26% pre-pandemic.
- Walkability is big: Walking trails, convenient retail shopping, and a nearby park are all top wants
- Minorities are driving increased interest in suburban living
- 71% of Asian buyers (up 9 points from pre-COVID)
- 63% of Black buyers (up 7 points)
- 52% of Latinx buyers (up 6 points)
- 57% of White buyers (up just 1 point)
The results are evenly split here: Overall, 39% are interested in a home that can accommodate multiple generations, and 39% are not interested at all. But when we break it down by ethnicity, there’s a big difference.
Who Wants a Multigenerational Home?
| ||All Home Buyers ||Hispanic ||Black ||Asian ||White |
|No ||29% ||27% ||30% ||29% ||42% |
|Not Sure ||23% ||20% ||20% ||25% ||23% |
|Yes ||39% ||53% ||50% ||46% ||35% |
Going green is good, and several top tech features are not only environmentally friendly but can also help reduce utility bills. In addition, security systems are highly desired, not only for safety but also to keep tabs on kids and pets left at home. (Plus, they can deter robbers.) It’s interesting to note that as incomes rise, so does the degree of importance of each tech feature.
Top 5 most-wanted tech features:
- Programmable thermostat
- Security cameras
- Video doorbell
- Wireless security system
- Multi-zone heat and air conditioning
Source: National Association of Home Builders, “What Homebuyers Really Want,” March 2021. The study is based on a comprehensive, nationwide survey of 3,247 recent and prospective home buyers conducted in the summer of 2020.