Housing Preferences of the Boomer Generation:: How They Compare to Other Home Buyers
Housing Preferences of the Boomer Generation:: How They Compare to Other Home Buyers

Housing Preferences of the Boomer Generation:: How They Compare to Other Home Buyers

by National Association of Home Builders

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Overview

Housing preferences of the boomer generation: How they compare to other home buyers is the latest study in NAHB's long history of tracking the evolution of home buyer preferences. How do various designs and features influence the home purchase decision? What influence do life events and people have on the decision to move to another home?Age can play a significant role in what buyers want to see in a potential new home. This study presents findings not just for the average home buyer, but also highlights the housing preferences of Baby Boomers (those born between 1946 and 1964) and how they compare to buyers of other generations.Housing Preferences of the Boomer Generation: How They Compare to Other Home Buyers discusses the latest data on preferences for home size, central-city versus the suburbs, kitchen, bathroom, and community features, and much more.

Product Details

ISBN-13: 9780867187496
Publisher: National Association of Home Builders
Publication date: 01/01/2016
Format: NOOK Book
Pages: 196
File size: 26 MB
Note: This product may take a few minutes to download.

About the Author

The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 700 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.

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CHAPTER 1

Home Type, Price, & Size

Preference for Single-Family Detached Homes Remains Strong

One of the most basic characteristics of a home is its structure type. The 2015 NAHB survey asked recent and prospective buyers about the type of home they currently live in and the type they would like to buy. Sixty-five percent of buyers would like to buy a single-family detached home, a slightly lower share than the 68% that live in that type of home now. A townhouse or attached single-family home is the preferred purchase option of 11%, slightly higher than the 8% that currently live in this structure type. When it comes to multifamily apartment or condo living, only 8% would like to buy such a home — about half the 17% that report living there now. Interestingly, a much larger share (10%) report wanting to buy some "other" type of home than currently live in them (2%) (fig. 1.1).

As Buyers Age, Fewer Prefer Single-Family Detached Home

Although a single-family detached home is the preferred home type of the majority of buyers regardless of generation, the share that would like to buy one does decrease among the older cohorts. Among Millennial buyers, 68% would like to buy a single-family detached home. The share rises and peaks at 72% among Gen X'ers, but then falls to 63% among Baby Boomers and to 55% among Seniors (fig. 1.2). Meanwhile, the share choosing "other" as the type of home they would like to buy increases from 7% among Millennial and Gen X buyers, to 12% among Boomers and 17% among Seniors — likely referring to units in assisted living or other type of seniors' community (Appendix A3).

Home Type for Boomers

A close analysis of the data among just Boomers shows that somewhat fewer (63%) buyers of this generation would like to live in single-family detached homes than currently do (69%), and that only about half (8%) would like to live in a multifamily apartment or condo than do so now (17%). On the other hand, and as mentioned above, 12% would like to buy some "other" type of home, compared to only 1% who currently live in such a home (fig. 1.3).

Over Half of Home Buyers Prefer a New Home

Faced with the alternatives of choosing between an existing home and a new home, 56% of home buyers indicate their first preference would be a new home while the other 44% would prefer an existing home. The preference gap between these two choices used to be much wider, however. In 2004, 71% of buyers preferred a new home, compared to only 29% who wanted an existing home (fig. 1.4). It is important to note though, that the rising trend in the share of buyers preferring an existing home came to a halt in 2015, when the share remained essentially unchanged (44%) from 2012 (45%).

Historically, the share of buyers whose first preference would be to buy a new home offered by a builder has been slowly rising, from 22% in 2004 to 33% in 2015. In contrast, the share whose first preference is a home custom built on their land has been cut in half during this period, falling from 49% in 2004 to 24% in 2015.

About Half of Boomers Prefer a New Home

When Boomers' preferences are analyzed separately, the results are not that different from a typical home buyer. Fifty-three percent of Boomers indicate their first preference would be to buy a new home. Of these, 31% would like to buy it from a builder and 22% would like it built on their own land. The remaining 47% are more interested in buying an existing home (fig. 1.5).

Home Buyers Expect to Pay 8% More in 2015 than in 2012

According to the S&P/Case-Shiller&&0174; U.S. National Home Price Index, home prices in the US jumped by 20% between 2004 and 2007, but then dropped by 22% between 2007 and 2012. Following annual gains in 2012, 2013 and 2014, the NAHB forecasts that this price index will be 22% higher in 2015 than in 2012 (fig. 1.6). Over the years, and in the face of this changing price landscape, home buyers have had to adjust how much they expect to pay for their next home (or have recently paid for one). In 2007, they anticipated having to pay 31% more than in 2004. In 2012, they expected to pay 12% less than in 2012. And in 2015, home buyers expect to pay a median of $219,896, 8% higher than in 2012 ($203,910), but still about 5% shy of what they expected to pay in 2007 at the peak of the housing boom ($230,900).

A detailed breakdown of what buyers (and Boomers specifically) expect to pay for their next home is as follows: 31% expect to pay under $150,000 (33% of Boomers expect to pay this much), 28% between $150,000 and $249,999 (27% of Boomers), 18% between $250,000 and $349,999 (19% of Boomers), 13% between $350,000 and $499,999 (12% of Boomers), 8% between $500,000 and $999,999 (6% of Boomers), and only 2% expect to pay $1 million or more for their next home (also 2% of Boomers) (fig. 1.7).

The median amount Boomers expect to pay for their next home is $212,572, significantly lower than the $231,622 Gen X buyers expect to pay, or the $223,853 Seniors estimate they will pay, and even lower than the median $219,967 Millennials anticipate paying (fig. 1.8). A plausible explanation for why Boomers have the lowest price expectations may be the fact that many are approaching retirement and may be considering a move to less expensive regions of the country.

A Traditional Forward Mortgage is How Most Buyers Would Pay for a Home

One of the earliest decisions a potential home buyer has to make is how to pay for it, since buying a home is the single largest purchase most people make in their lives. Results show that 67% of recent and prospective buyers would use a traditional forward mortgage, 28% would pay up front in cash, 3% would use a reverse mortgage, and 2% would use some "other" way to pay for their new home (fig. 1.9).

Cross-tabulations by generation help to shed light on the notion that age plays a significant role in how buyers pay for a home. As figure 1.10 shows, Millennial and Gen X buyers have identical expectations when it comes to financing their home purchase. In both groups, the large majority — 79% — would use a traditional forward mortgage, 17% would pay all cash, and 3% would opt for a reverse mortgage.

Among Baby Boomers, the share using a traditional mortgage falls significantly, down to 62%, while the share spending their cash almost doubles to 32%. Only 2% of Boomers indicate they would use a reverse mortgage for purchase. Of all the generations, traditional forward mortgages are least popular among Seniors, only 48% of whom would use this product to pay for a new home. In fact about the same share, 47%, would pay in cash, and only a minor 3% would opt for a reverse mortgage.

Most Buyers See Value in Professional Designations

Survey findings clearly support the theory that home buyers appreciate and see value in professional designations. In order to provide buyers a clear understanding of what a designation is, the question explained that "professional designations are credentials from trade associations or government agencies certifying expertise in particular fields." Buyers were asked whether they agreed with a series of statements regarding contractors with such designations.

Seventy-nine percent of home buyers agree that contractors with specialized designations are "more professional and credible," 76% agree that they "provide better quality work and craftsmanship," 74% agree they "provide better service levels," another 74% agree they are "more reliable," and 62% agree they are "worth paying a higher price for" (fig. 1.11).

No significant variations exist in the perception of certified contractors among Boomers or any of the generation groups presented in this study.

Buyers Want About 2,000 sq. ft. of Space

Home buyers report they currently have a median of 1,859 sq. ft. of finished space in their homes, but would like to have 2,020 sq. ft. in a new home — about a 9% increase in finished area. The last time this study was conducted in 2012, the home size desired by buyers across the country — 2,226 sq. ft. — closely matched the actual median size of all single-family homes completed in the US that year — 2,306 sq. ft. (only 4% larger than the size desired). In contrast, the rapid increase in the size of homes built in the last few years has created an important breach between what buyers would like to have (2,020 sq. ft.) and the median new home size in the country in 2014 — 2,453 sq. ft. (21% larger than desired).

Boomers already live in the size home they want. This generation reports wanting to have a median of 1,879 sq. ft. of space, which is just what they have in their current homes — 1,877 sq. ft. (fig. 1.12). Younger generations, not surprisingly, would like more space than what they have now. In fact, Millennials would like 39% more space: 2,375 sq. ft. instead of 1,705 sq. ft., while Generation X would like 23% more: 2,315 sq. ft. instead of 1,880 sq. ft. The only generation wanting to downsize — and only a little bit — is Seniors. This group currently lives in a home about 1,895 sq. ft., and they would like one about 5% smaller with 1,791 sq. ft.

Boomers (35%) are more likely than the typical home buyer (28%) to want to live in a home smaller than 1,600 sq. ft. About 22% of Boomers would like to buy a home that is 1,600-1,999 sq. ft., and another 22% would like one in the 2,000-2,499 sq. ft. range. These shares mirror closely the proportion of all buyers interested in homes of those sizes. In contrast, Boomers are less likely than the typical home buyer to want larger homes: only 10% want a home 2,500-2,999 sq. ft., compared to 14% among all owners, and only 11%are interested in a home 3,000 sq. ft. or larger, compared to 15% among all buyers (fig. 1.13).

Lot Size is not an Issue for More than 20% of Buyers

More than one-fifth of home buyers (22%), and of Boomers specifically (23%), do not have a minimum lot size in mind when buying a home (fig. 1.14). Either 1/8 or 1/4 of an acre would be acceptable to 30% of Boomers, but only to 26% of all buyers. One-half of an acre would be the minimum required by 18% of Boomers, compared to 21% among all buyers. Meanwhile, similar shares of Boomers (29%) and of buyers in general (30%) would require at least 1 acre of land when buying a home.

Tabulations across the four generation groups show an inverse relationship between age and lot size desired. This is probably not surprising, given that older home buyers are less likely to want yard space for children to play in and may be less eager to take on the work of maintaining a larger yard. While 39% of Millennials would require a minimum of at least 1 acre when buying a home, the share decreases to 34% among Gen X, 29% among Boomers, and to only 18% among Seniors. In contrast, the share that sees lot size as irrelevant (i.e., they do not have a minimum lot size in mind) doubles from 17% among Millennials to 34% among Seniors (fig. 1.15).

CHAPTER 2

Room Layout & Design

Boomers Favor Open/Partially Open Designs

The NAHB survey included a number of questions on the basic design and arrangement of rooms in the home. Among these were four questions on how home buyers prefer to have particular areas of the house separated, if at all.

In all four cases, home buyers in the Boomer generation overwhelmingly favored designs that were either completely open (essentially making the areas part of the same room) or partially open (separated by something less than a full wall). By a relatively narrow margin (45 to 41%) Boomers favored a completely open over partially open kitchen-dining room arrangement. In the other three cases (kitchen-living room, kitchen-family room, and dining room-living room), Boomers were slightly more likely to choose the partially open design (fig. 2.1).

Of the four cases shown in the figure, Boomers chose a separate, but side-by-side room arrangement most often for the dining room-living room combination (19% of the time). Boomers chose rooms in completely separate areas of the house most often for the kitchen-family room combination (17% of the time).

Each of these questions gave home buyers the option to say the choice was not applicable because they didn't want one (or, in the case of the dining room-living combination, both) of the areas in the home. This block of questions assumed no buyer would choose a home without a kitchen area (something the International Residential Code requires builders to provide in every dwelling unit).

When given the choice, Boomers seldom expressed a desire for a home without one of the areas/rooms listed. At the extreme, in the question on kitchen-living room arrangement, no Boomers at all said they didn't want the living room. But the "NA" (or not applicable) percentages were small (6% or less) in all cases.

In their preferences for completely open and partially open designs, Boomers were little different from home buyers in the NAHB survey in general (fig. 2.2). Preferences for the space allocated to different rooms, and arrangements that involve a combination of living and family room are covered in the sections of this book on specialty rooms (Chapter 6) and trade-offs (Chapter 9).

Older Buyers Want Everything on One Floor with No Basement

The NAHB survey asked buyers whether their first choice in a new home would be a one-story, split-level, or two-story floor plan. Overall, a strong majority (64%) prefer the one-story plan, but this is driven primarily by the older categories of buyers.

For example, three-fourths of Baby Boomers and 88% of Seniors prefer a one-story floor plan, compared to only a 35% of Millennial home buyers. Preference of a single-story home increases systematically with the age of the home buyer. Irrespective of the buyer's age, a relatively small share (less than 10%) prefer a split-level home (fig. 2.3).

The desire to avoid going up and down stairs similarly shows up in the systematic preference among older buyers for a home without a basement. In this question, buyers were given a rough idea of the additional cost a basement would entail: $17,500 extra for a half basement, $35,000 for a full basement.

Under these assumptions, 43% of buyers said they preferred a home without a basement, but there were strong differences by generation. Half of Baby Boomers and nearly 60% of buyers older than Boomers do not want any type of basement, compared to only 23% of home buyers in the millennial generation (fig. 2.4).

Consistent with the desire to keep things on one floor, a large majority (74%) of Baby Boomers prefer to have the clothes washer and dryer on the first floor, followed at a distance by the garage (11%) and basement (10%). However, Boomers are only slightly different from other buyers in this respect. Overall, 68% of home buyers prefer the washer and dryer on the first floor of the home. The second floor is a relatively unpopular washer-dryer location, irrespective of the age of the buyer (fig. 2.5 and Appendix A9).

For Those Who Do Want a Two-Story Home, the 2nd Floor is the Preferred Location for a Master Bedroom

Among boomers who prefer a two-story home, over half (52%) would like the master bedroom located on the second floor. Statistically, boomers are not much different from other home buyers in this regard (fig. 2.6).

Small sample size is likely to be an issue here, however. As figure 2.3 demonstrated, only a small share of boomers in the survey want a two-story plan in the first place.

Few Boomers Want More than Three Bedrooms

In addition to location of the master bedroom, the number of bedrooms in the home is an important issue for most buyers. Nearly half (49%) of all prefer three bedrooms. Although three bedrooms is a popular choice among buyers of all generations, the younger the buyer, the more likely he or she is to want a home with four or more bedrooms.

The major transition in this tendency occurs between home buyers in Gen X and Baby Boomers. While well over 40% of Millennial and Gen X home buyers prefer a home with four or more bedrooms, the percentage drops to less than 20% among home buyers in both the Boomer and Senior generations.

In fact, home buyers in the Boomer and Senior generations are slightly more likely to say they want a home with only two bedrooms than one with four or more bedrooms. A very small share of home buyers in any generation want a home with one bedroom (fig. 2.7).

Most Boomers Want 2 or 2 1/2 Bathrooms

Assuming an additional cost of $25,000 for each full bath, most home buyers said they wanted a home with either two or two and a half bathrooms (38% and 26% of buyers, respectively).

The NAHB survey assumed most home buyers have a reasonably good idea of what constitutes a full and a half bathroom and didn't attempt to provide definitions. According to the official definitions used by the Census Bureau in the survey it uses to track New Residential Construction, a full bathroom has a sink, toilet, and either a bathtub or shower, or shower-tub combination. A half bathroom has a toilet, bathtub, or shower, but not all the fixtures needed to qualify it as a full bathroom.

(Continues…)


Excerpted from "Housing Preferences of the Boomer Generation"
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Copyright © 2019 National Association of Home Builders.
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Table of Contents

Acknowledgments,
Executive Summary,
1. Home Type, Price, & Size,
2. Room Layout & Design,
3. Most & Least Wanted Features,
4. Kitchen and Baths,
5. Windows, Doors, Flooring, & Decorative Features,
6. Specialty Rooms & Features,
7. Outdoor & Accessibility Features,
8. Technology in the Home,
9. Trade-Offs Buyers are Willing to Make,
10. Impact on the Environment, Utility Costs, & Energy Efficiency,
11. Choosing a Community,
12. Factors Influencing Move to a New Home,
13. Survey Design, Respondents' Profile, and Their Current Home,
Appendix A: Detailed Tabulations,
Appendix B: Survey Questionnaire,

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