Uptick in Lower-End Housing Could Get More Millennials Off Sidelines
Millennials delaying home ownership has been cited as a threat to the housing recovery and the reason for sluggish household formations. But Builder Magazine finds that some of the hottest markets for first-time buyers are those that have had an increase in new homes sold for less than $200,000.
More construction in the lower-end housing market may be the key to attracting more Millennial home buyers. Young adults have struggled to break into home ownership in recent years, strapped with high student-loan debt and unable to meet tighter lending standards.
About 36 percent of American adults under the age of 35 own a home, down from 42 percent in 2007, according to the Census Bureau.
In some areas of the country, builders are ramping up supply of homes costing $200,000 or less, often in college towns and areas that have improving job markets.
The following markets have had some of the largest increases in the percentage of new homes sold under $200,000 in the fourth quarter of 2013 and the first quarter of 2014:
- Jacksonville, N.C.: 11.05%
- Huntsville, Ala.: 5.94%
- Killeen-Temple-Fort Hood, Texas: 4.68%
- Columbia, S.C.: 4.18%
- Durham-Chapel Hill, N.C.: 3.57%
- Las Vegas-Paradise, Nev.: 3.04%
- Columbus, Ohio: 2.65%
- Lakeland-Winter Haven, Fla.: 2.63%
“Home builders and developers can and will develop offerings that will be in price ranges that can stir interest, but only when their supply chain of lots, materials, labor processes, and manufactured products can be ensured on a speedy and executionally excellent basis