Housing Construction too Slow for Growing Population of Millennials

Dec 4 2019, 10:15AM By Jann Swanson

There is widespread industry concern that new homes and apartment buildings are not being constructed fast enough to keep up with demand and now the National Association of Home Builders (NAHB) says there is a mismatch between where they are being built and where they are truly needed.  Litic Mulali analyzed the third quarter edition of NAHB’s Home Building Geography Index (HBGI) for a post in the association’s Eye on Housing blog.  

The HBGI identified “Millennial counties,” those counties in which Millennials, persons born between 1981 and 1997, make up at least a 26 percent share of the local population. The top 25 percent of counties with a high millennial concentration also contain 62 percent of the total U.S. population.  In a third quarter analysis of HBGI, NAHB found that those counties accounted for 59 percent of single-family and 80 percent of multi-family construction.

Those numbers, especially for multifamily construction, seem appropriate given the population numbers, but NAHB found that the growth rate for construction numbers is generally lower than in the remaining 75 percent of U.S. counties. When the analysis focuses on Millennials, the HBGI data shows that just under 60 million Millennials live in that top 25 percent of “Millennial counties.”  In other words, 67 percent of all of the Millennial  generation, the generation that will represent a critical source of emerging housing demand over the next decade live in the very counties where building growth has lagged. While 2016 saw brief double-digit, year-over-year growth rates for single- and multifamily permits, these rates have slowed in recent quarters.  This indicates there could be a growing geographic mismatch between younger households with expanding housing demand and where construction is expanding.

As shown on the map, the four-quarter moving average of year-over-year single-family construction growth rates was negative for Millennial areas in the third quarter (-2.4%). This was similar to the negative trend in apartment construction that was observed in large metro core counties where many young urban professionals reside.

The graph below shows that growth in the rate of single-family home construction has generally been generally lower in Millennial-intensive counties compared to the rest of the nation – the opposite of what future housing demand requires. At the same time, multifamily construction has been relatively flat in those counties since 2017 but did pick up in the most recent quarter.

Murali concludes that the new HBGI data indicate that new home construction is concentrated in the top counties for Millennial population, “But the growth rates for these areas have been lagging the rest of the nation in recent quarters, suggesting a possible spatial mismatch between housing demand and housing supply, which further exacerbates the ongoing housing affordability crisis particularly for younger households.”

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Make Your Property More Attractive for Homebuyers

Ensure a Good First Impression

Homebuyers make up their minds about a property in the first few minutes. Make sure your home makes that vital first impression. New paint does wonders. Make sure the front yard is flawless with manicured lawns and attractive foliage. Add a hanging basket or some flower pots at the door. The front door is also critical, make sure the hardware is presentable.

Make them Feel Welcome

Don’t forget buying a home is in many ways an emotional decision, so it’s important to give buyers that warm and fuzzy feeling! Keep the temperature in the home at a comfortable level. Light some candles in the bathrooms and make sure it smells nice and clean. Have fresh flowers around the house.

But don’t make it too personal

Make them feel welcome, but don’t go too far. Too much personality, for example in the form of personal possessions and family photos makes it hard for buyers to visualize living in the space.

Clear out the Clutter

Make sure your property is clutter-free for all your viewings. This will make your home look and feel bigger, and the buyers will be able to imagine how they could make the space their own. Make sure that there is a clean, logical flow through the home by getting rid of all excess furniture. Less is more.

Improve Lighting

This is another way to make your home seem more spacious. Open all your curtains and flood the space with natural light. Make sure the darker rooms are also lit. Invest in some light fixtures and fittings, and place them strategically to illuminate even the gloomiest of areas.

Decorate to Sell That House

Slap on a fresh coat of paint in a neutral color to give it that blank canvas look but do not be too sterile. Have some contrast in the trim as well as the ceiling. Neutral colors make properties appear lighter and brighter, so take advantage of this inexpensive and easy option. You may also add color with decorative window coverings, rugs, and towels.

Clean Up Your Act

Your home should be spotless. Make sure the beds are made and the countertops are free of clutter. The dishes should be put away and nothing should be scattered on the floor. Don’t forget to tidy your garden too: Cut the shrubs back, sweep the patio, and wipe down the backyard furniture.

Those Minor Repairs You Put Off

It is easy to forget things such as broken doorknobs, cracked tiles, holes in walls and damaged but buyers will notice them first thing as they are walking around your home.

Maximize Your Space

The golden rule of selling is to make your space look and feel bigger and better than what your competitors have to offer. We’ve already mentioned that lighting your home, both naturally and artificially, can maximize your assets, but getting rid of bulky furniture can also be a great way of making the most of what you have. Large pieces of furniture make a space feel smaller, so put these items into storage and dress your home with more compact pieces.

Don’t Forget Your Floors

Make the investment of improving and investing in those floors. Worn carpets and damaged vinyl floors need to be replaced, and wooden floors especially should undergo some maintenance. This is not chap by any means, but the prospect of selling your home for the best possible price will likely outweigh the cost.

Remove Pets During Showings

You do not need to remind the potential buyer that the previous owner kept pets.

Try to remove your pets from your home when you are showing the home. Having a pet in the house or yard can create complications for your agent while trying to show the house, and puts your pet at risk of accidentally getting out during the showing. There are also liability issues to deal with as well. They may react differently to stranger and it may cause them stress. All pet-related damage should be repaired prior to showing the home. Make sure to also remove all odors and stains. New visitors will notice smells when they come to view the house. This is not something you want to happen. Have your carpet and floors professionally cleaned or replaced. Pick up any messes in the backyard and have any sod replaced and other damage repaired.

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