Answering the Call From Today’s Homebuyers
Home builders are responding to affordability concerns and changing demands of the American homebuyer, according to coverage of the International Builders’ Show (IBS), held by the National Association of Home Builders (NAHB) from Jan. 19-21. The NAHB refers to IBS as the home building industry’s largest annual trade show.
This year’s event showcased homes designed to accommodate more than one family or help homeowners earn extra income. According to The Wall Street Journal (subscription required), one concept home featured a separate second-floor unit to accommodate adult children living at home or aging parents.
The 5,200 square-foot home from Element Design Build is in response to more buyers needing to house more than one generation under the same roof. A National Association of REALTORS® (NAR) study found 13 percent of 2014 home purchases “were by a multigenerational household, consisting of adult siblings, adult children, parents and/or grandparents.”
A rendering of the New American Home. (NAHB)
Site prep. (NAHB)
The house begins to take shape. (NAHB)
Nearing completion. (NAHB)
The finished product. (NAHB)
Growing demand from multigenerational households is also part of why Fannie Mae is now offering its HomeReady™ mortgage product.
“This new policy moves a concept adopted on the servicing side to the lending side in order to help multigenerational and extended households obtain homeownership,” Jude Landis, Fannie Mae’s vice president of single-family credit policy and risk management, said recently about HomeReady.
Housing affordability was another item tackled by home builders at IBS.
A Pardee Homes house showcased at the show targeted young-adult homebuyers. Priced in the mid-$300,000 range, the home included two guest suites that can be rented on sites like Airbnb. The suites, designed for one to two people each, featured separate entrances and kitchenettes.
Pardee Homes’ offering reflects a study from its parent company, TRI Pointe Group. The study found that 35 percent of young adult homebuyers want to be able to rent out space in their homes.
“A lot of their motivation for doing that is to make the financial step of buying their home more doable,” says Linda Mamet, vice president of corporate marketing at TRI Pointe Group.
Housing affordability could hold back total home sales in 2016, according to Fannie Mae Chief Economist Doug Duncan. “Our theme for the year is housing affordability constrains as the expansion matures,” Duncan said recently on CNBC’s Closing Bell.
With the latest data from NAR suggesting affordability may indeed play a role in the 2016 housing market, it would seem the builders are on to something with home features that accommodate more occupants and even generate income.