Households headed by "Generation X-ers" and members of the "echo-boom" purchased 55% of all newly built homes sold in 2003 and are fast becoming the trendsetters in U.S. housing markets.
That's what can be drawn from Census Dept. reports and newly analyzed buyer preferences data released by the National Association of Home Builders.
"A new generation is viewing the housing market from an entirely different perspective than the baby boomers who’ve traditionally dominated industry trends," says Jerry Howard, executive v.p. and CEO of the Washington, DC-based NAHB. "They’re techno-savvy and they have a strong awareness of all of their options."
Gen-Xers, in particular, are wielding their buying power to shape today's new-home features and market trends, according to the NAHB.
"They and younger buyers were responsible for more than half of all new-home purchases in 2003, and are twice as likely to purchase new homes in the immediate future as baby boomers and seniors," Howard observes.
American Housing Survey (AHS) data from the U.S. Commerce Dept. reveals that, while households headed by those aged 27-40 (the "Gen-X" generation) accounted for 28% of all U.S. households in 2003, they were responsible for fully 49% of new-home purchases that year. Another six percent of newly built homes were purchased by echo-boomers (born after 1979), while 33% were purchased by baby boomers and 12% were purchased by senior citizens, aged 60 and up.
At the same time, the NAHB noted that its research indicates that 37% of Gen-Xers and 27% of echo boomers intend to buy homes within the next two years, compared to just 13% of baby boomers and six percent of seniors.
This is likely to have a major impact on the next generation of home building - and, eventually, on residential remodeling, including kitchen and bath renovation, the NAHB said. "Previously, there was speculation that younger buyers would be more thrifty than their parents with respect to their housing choices, but our research shows just the opposite is true," notes NAHB Director of Research Gopal Ahluwalia.
In fact, many favored options among younger home buyers support the idea of a "move-up mentality," Ahluwalia says. For example, both echo boomers and Gen-Xers say they would like to have a home that is about 50% larger than their current residence, and 91% of echo-boomers say they would like their next home purchase to be a single-family detached home.
"We find that the preferences of younger buyers tend toward greater space and more sophisticated amenities than those of their forebears," comments Howard. "Incorporating these preferences in homes that new buyers can afford will be our industry’s challenge going forward."