Preferred home designs have changed significantly over the past 50 years, and they continue to change today.
These changes – past and future – were the key subject of a recent report by Robert Dietz, the chief economist at the National Association of Home Builders, as reported by the National Association of Realtors.
Dietz compared changes from many years ago with trends surfacing in the current market. “While buyers both then and now prefer single-family homes in the suburbs, buyers in 2016 expect new homes to be adaptable, open, and efficient.
“When it comes to future design preferences, Dietz predicts that buyers will place a high-importance on choosing a new home that has efficient design and energy efficient features.”
As always, location is a top priority for today’s buyers. “Dietz believes that location will play a larger part in where buyers choose to build, and single-family home sales will soon take over multifamily.
“We may see a rise in townhomes and locations near urban villages with walkability features, but overall the same preferences that have been in the market for generations will remain. Most people want to own their own home and want their own place out in the suburbs, and I think that will continue.”
He then pointed to new-home design characteristics in 2016:
“The average size of the home keeps growing, mainly because builders are catering to a higher-income, older demographic. About 60 percent of new homes have at least two stories. The need for multiple levels is due to millennials wanting more space for their growing families, and also because of the increase in multi-generational households.
“Open-floor design is the new norm across all generations of buyers. New home construction emphasizes energy efficiency and efficient design.”
Home designs continue to evolve.
Q: Are many homeowners still underwater?
A: That’s still a problem for owners. But the situation is improving.
Fewer homeowners were underwater as the negative equity rate fell to 13.1 percent in the United States, according to the fourth quarter Zillow Negative Equity Report.
“But more than 820,000 underwater homeowners still owe over twice as much on their mortgages as their homes are worth, a reminder that some owners may not see positive equity in their homes in the foreseeable future.
“Six million homeowners were still in negative equity, which means they owe the bank more than their homes are worth. A year ago, 8 million homeowners were upside down on their mortgages.
“Over time, negative equity can act as an anchor on a housing market, preventing underwater homeowners from listing their homes and reentering the market. It is more prevalent in less expensive areas that are affordable to first-time buyers. Without these homes available, many potential buyers are sidelined and unable to take advantage of mortgage rates that remain near historic lows.”
Q: Are commercial mortgages growing in numbers?
A: Here’s a statement from the Mortgage Bankers Association:
“A number of market and regulatory factors are impacting the commercial and multifamily real estate finance markets,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.
“As just one example, in the past month, several Wall Street analysts have reduced their expectations for 2016 commercial mortgage-backed securities issuance by 25 to 30 percent. The paper looks at the major sources of commercial real estate lending and at some of the market and regulatory changes that could affect their appetites to lend over the coming year.”
Q: Are there any special groups that usually associate home ownership with the “American Dream”?
A: Millennials and people of color are most likely to associate homeownership with the American Dream, according to the latest Zillow Housing Report. The firm issued a news release on the subject:
“Among people 18-34 years old, 65 percent said homeownership and the American Dream go hand-in-hand. That’s more than any other generation. Similar to millennials, 64 percent of respondents age 65 and older said homeownership is necessary for the good life and the American Dream,” Zillow reported.
WOODARD has been writing about real estate news and trends since 1971 and is the resident storyteller at the Ronald Reagan Presidential Library in Simi Valley, Calif.