This Just In: America Still Loves the SuburbsOctober 23rd, 2015 by Trey Barrineau
Here’s some surprising news for those who think millennials will transform America’s housing market into one dominated by renters in highly urbanized areas: Trulia economist Ralph McLaughlin said his company’s research indicates that most younger Americans want to own a home in the suburbs rather than rent in the cities.
“Many believe that home buyers are bucking the trend of previous generations in that they want to live in urban areas and want to rent,” McLaughlin said during Wednesday’s National Association of Home Builders (NAHB) 2015 Fall Construction Forecast webinar. “What we are finding from our surveys is just the opposite. Among millennial renters, almost 90 percent say they eventually want to purchase a home. That is significantly higher than Gen Xers, who were hurt by the recession, and quite a bit more than current baby boomer renters, who are at 40 percent.”
However, the vast majority of millennials, many of whom are struggling with huge levels of college debt, say it’ll be at least two years before they are ready to buy a home.
According to a Trulia survey conducted last November, about half of Americans prefer to live in suburban areas, around 25 percent favor big cities and just over 20 percent would choose rural communities.
“As we get into the recovery, suburban areas are growing faster than urban areas,” McLaughlin said, noting that the percentage of households living in urban neighborhoods in 2013 was lower among most age groups compared to 2000. “That is a sign that the urbanization trend we saw start to happen at the beginning of the recovery was more of a blip rather than a new rule. So again, this shows there really isn’t an urbanization trend among households.”
He also shot down the idea that demand is driving home price growth in urban areas by pointing out that it’s much more expensive to build in cities.
As far as the types of residences Americans prefer, think traditional single-family home on a cul-de-sac, not hip urban loft. Forty-four percent of Americans say they want to live in a house that’s between 1,400 and 2,600 square feet.
“Home buyers are saying they prefer modern and modest-sized homes in the suburbs with amenities,” McLaughlin said.
About 45 percent of millennials want a balcony or some sort of outdoor space, according to McLaughlin. A backyard deck was most popular with Gen Xers, while baby boomers say a vegetable garden is their No. 1 amenity choice.