HOW SINGLE WOMEN ARE CHANGING THE HOME BUYING MARKET

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How-Single-Women-Are-Changing-the-Home-Buying-Market-240x170Single women are quickly becoming major players in the home buying market. According to the National Association of Realtors’ recent report on Home Buyer and Seller Generational Trends, single women made 60 percent more of recent home purchases than single men across all age groups. Single women also have emerged as largest home buying demographic after married couples.

And this trend of single female home ownership is only expected to continue in the coming years, thanks to various factors including a decreasing gender-pay gap that is giving women increased financial independence. In some areas, their incomes are even increasing faster than their male counterparts.

So, as the housing market continues to change, marketing to single women of all age groups is going to become highly important. From baby boomers to millennials, this means offering them a variety of choices and designs, along with features such as easy parking, safety and overall affordability—all with an obvious appeal for all single females. Here is a look at what each of these age groups is likely to desire when entering the housing market.

Baby boomers
NAR found that single female baby boomers buy twice as many homes as single men do and account for one out of every five houses sold in their own age group, making it wise to consider their preferences. Boomers tend to live in the suburbs and have more space than other generations who live in smaller city apartments. Custom hardwood cabinetry, granite or marble countertops, as well as the ability to customize all of a home’s features, are attractive options for single female baby boomers. This consumer will not turn away from affordable luxury, like a glass-gated walk-in shower or custom bathtub.

Millennials
This age group tends to live in smaller spaces within major cities, close to their workplaces and social centers. Millennial women also tend to get married later and are well educated. Their demand for housing likely will increase, along with their salaries. McMansion-style designs will not sell well within this demographic, which seeks to differentiate themselves from their parents. They tend to favor unique, stylish, but practical, designs. This could mean an in-kitchen cocktail/bar space for entertaining or a shower with a top-mounted rainfall shower head that adds comfort and class to a small space. Location will be particularly important for this group. On the upper end of this market, a preference for condos in dense communities with vibrant street life is expected.

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Millennial Home Buyers 2016

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It looks like millennials are finally jumping into the home ownership phase of their grownup lives. Reports from Realtor.com identified some hot spots where millennials accounted for a significant portion of new mortgages. Some of these cities are not the usual millennial haunts: Des Moines, Iowa; Provo, Utah and the cities of Baton Rouge Lafayette, New Orleans and Shreveport in Louisiana among many others.
It may be that value-oriented millennials were holding off on buying their own homes because they were waiting for affordable starter homes. One of the nation’s largest homebuilders, D.R. Horton, launched a new division called Express to focus on affordable entry-level homes. Since this sector is not a high-profit project, other builders have taken a wait-and-see strategy to see how D.R. Horton fares. Horton has delivered in spades with 14 percent of its 2015 revenue attributed to the Express Division, lifting its net sales figure to 26 percent for the year.
Taking a page from D.R. Horton’s strategy, Meritage Homes has begun developing entry-level-plus homes that are priced at $200,000, which is lower than the price of standard Meritage homes by about $50,000 to $100,000. These Houston homes are smaller and stripped of features such as mud rooms and intricate details to meet the price points. By using more practical materials such as pressboard counters, Colorado’s Terrain community by Tri Pointe Group Inc. has developed homes that are priced lower than traditional construction by as much as 30 percent.
Housing affordability will drive millennials to buy their starter homes in 2016. Rents are rising, making home ownership a more viable option especially when affordable housing units are available.wpid-20110910_140127.jpg

CHALLENGING CURRENT HOUSING TRENDS

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Over the last few years, two disconcerting trends have been rearing their ugly heads in the housing industry. The first is that household formation has been standing still while the second is a dwindling rate of homeownership. However, the first trend may be recovering since the millennial generation is starting to make its way into the world by finishing college and obtaining well-paying jobs. Unfortunately, homeownership rates are still dropping.
Challenging the Trends
A study completed by the Mortgage Bankers Association, or MBA, tracked data from 1975 to 2014. According to the assessment, during the next 10 years, the demand for houses will grow. In the report, the research team said, “By 2024, demographic and economic changes will bring what could be one of the largest expansions in the history of the U.S. housing market.” In fact, the research group estimated that the growth would total more than 15.9 million households.
Societal changes and the Great Recession caused many people to alter key life stages. In a comparison between the early 1990s and now, more of today’s women are going to college to earn a degree. As a result, people are marrying later in life and starting families in their 30s, which is causing them to put off homeownership.
Growth Predictions
According to the MBA study, the recent drop in homeownership is unlikely to remain a permanent condition. In the past, people usually purchased homes based on the country’s economic conditions, federal policies regarding homeownership and the mortgage markets. In addition, an aging population generally signals a boost in the housing market, and the millennials are growing up fast.
Tags: homebuyers, homeowners, market trends, real estate
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