According to Home Building Geography Index, counties that have at least one-quarter of millennials in their population are categorized as millennial counties. The entire US population is counting over 62% of millennials in the entire population, however, only 59% of millennials own single-family homes. In accordance with this statistic, homebuilders are not responding to millennials’ demand.
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Homebuilders Are Not Building for Millennials
Even though this demographic group is predicted to become the largest group of home buyers for the upcoming year of 2021, homebuilders don’t seem to understand the demands shown by millennials. There is already a shortage of homes for rent and purchase, while this case should affect the affordability of homes for millennials. As NAJHB Chief Economist, Robert Dietz, claims, one would expect that the percentage of single-family homes owned by millennials is higher than 59% when compared to the fact that 62% of the US population is millennials.
Higher Cost of Labor – Higher Prices for Homes
It takes more to build a home in the current period due to the shortage of labor, combined with regulations, and higher costs for buying land. The core demand is among millennials at the moment as this is the densest demographic in the US, however, products appear not to be built or produced for millennials. This case is showing that homebuilders and other sectors might not understand the demand for millennials. At the same time, as the cost for construction labor and related resources is on the rise, home prices are consequently increasing. The shortage of homes for sale and rent is also contributing to the overall situation where only 59% of millennials own a single-family house. At the same time, millennials are waiting longer to be able to own a home when compared to other generations.
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