Money can’t buy happiness, but it can buy a new home, and those who live in the states where new homes are selling most have the highest well-being. Based on the recently released Gallup-Healthways Well-Being Index and Metrostudy data, more than a quarter of new homes closed in 2014 were in the top 10 states ranked for highest well-being, meanwhile only about 10% were closed in the states ranked lowest.
The Gallup-Healthways Well-Being Index ranks states based on five factors pertaining to overall resident well-being including purpose, social, physical, financial, and community. The 10 highest states are predominantly concentrated in the Mountain region and the lowest in the Midwest.
Well-Being Index Score
Well-Being Index Score
The connection between financial well-being and home sales is a no brainer, but the other metrics tells an interesting story. States with greater sense of community well-being aligning with new home sales reaffirm trends like high value placed on walkable neighborhoods and mixed-use developments. These trends reinforce physical and social well-being, too. States with higher well-being are already host to metros with high walkability, and the numbers of new communities capitilizing on this trend are growing.
The Gallup study maps states in five quintiles for overall well-being. Note the states most known for booming new home markets—Texas, Florida, and North Carolina to name a few—are all in the top three.
Among the top 100 builders in 2014 and all new home closings nationwide, the top 10 make up about 30% of all the year’s new home closings. Granted this is largely skewed by Texas, which overall closed 73,942 new homes last year, but those smaller market states saw an increase in new home sales last year. Of the top 10, only two experienced a year-over-year decrease in new home closings between 2013 and 2014—Utah and Wyoming—and both decreased less than 4%. The second and third quintiles mark the only discrepancy between Gallup’s grouping and percent of new home closings last year with the third quintile overtaking the second. Those two quintiles, 20 states combined, make up about half of new home closings last year, while the bottom two quintiles, the 20 states ranked lowest for well-being, make up less than a quarter.
The top five builders for new home closings in 2014—DR Horton, Lennar, Pulte Group, NVR, and Ryland Group—had the most success last year in the top quintiles for well-being, too. More than 35% of DR Horton’s 2014 closings were in the top 10 states for well-being with a majority of that in Texas. By looking at the top three quintiles for well-being (30 states or 60% of the nation), four out of the top five builders closed at least 75% of homes in 2014 in the states ranked highly for well-being. The highest, Lennar, closed more than 90% of homes in those three quintiles. The lone exception is NVR, which still approached 60% with 57.36% of closings among the three.
There are, of course, plenty of factors that play a role in new home market health entirely independent from the well-being of potential buyers. Well-being of buyers impacting home sales, particularly from a financial standpoint, is also obvious, but social, physical, purpose, and community well-being are not among the top markers for a growing market. Does higher overall well-being make for more new home buyers, or are people happier when they're in a new home? Either way, states where residents are feeling better are a visibly better target for builders.
See the full report from Gallup-Healthways here.