Singles buyers are fonder of new homes than couples. They are also more serious about their home-shopping efforts. And they are more willing to consider attached housing.
These are the findings from a special cut of the results from the BUILDER/American LIVES New-Home Shopper Survey. Single buyers—young and old, female and male, who currently account for about one-third of all home buyers--will be the fastest-growing household type over the next decade, according to recent demographic projections from the Joint Center for Housing Studies at Harvard University.
To benefit from this groundswell, however, builders may need to change the way they cater to single buyers. “Builders are doing their best to [tick off] young females,” says Brooke Warrick, president of American LIVES, which conducted the survey. “If the young woman is shopping with a male friend or ‘Uncle Buck’, as they often do, salespeople routinely present the collateral material to the man.“
That's unfortunate, because young single buyers tend to prefer new homes. The BUILDER/American LIVES survey shows that 61% of single buyers shopping for new homes last summer prefer new homes, compared to 51% of couples. Many of these single buyers live in apartments with outdated kitchens and baths, and as prospective homeowners, they are on a mission to obtain cleaner, shinier spaces.
“Young single buyers are often driven by what they don’t want,” says Warrick. “They dislike the kitchens and baths that dominate the stock of multifamily buildings. They are attracted by new homes that have more up-to-date kitchens and baths with more space, better materials, and greater functionality.”
The danger to new-home builders, Warrick says, is that multifamily building owners appear to have figured this out. “They are catching up with new-home builders by updating, replacing, and/or adding to their inventory… Stay tuned.”
The survey also shows that singles are also more serious than couples about their efforts to find a new home. This is especially true of recent divorceés and other singles who have recently gone through life-changing events.
The survey shows that nearly half of singles are considering a move because of a life-changing event, such as a divorce, a new job, or the death of a spouse. "After job growth, divorce may be the biggest driver of new-home demand," says Warrick.
Singles, with or without children, are also nearly three times more likely to consider a townhome (29%) compared to, say, couples with children (12%), according to our survey. They are only slightly more likely than couples without children (26%) to consider a townhome.
The finding makes sense, given that having neighbors nearby brings a sense of safety to people who live alone. “Young females in particular want a safe home, so entry lighting around the garage and doors becomes more important,” says Warrick. “Builders need to avoid blind corners in design.”
The survey also shows that community belonging is more important to single buyers than married or un-married couples. This is especially true of older single female buyers, whose husband may have died.
“One of the big reasons singles want attached housing is that they want to live in a community," says Warrick. "I’ve often said to builders, ‘Why not just build a community and throw in the house?'”
Singles are also more motivated by a shorten commute than family buyers. Our survey results show that 35% of single buyers were considering purchasing a home because they wanted to be closer to work, compared to 27% for couples.
But these buyers face some tough trade-offs, since close-in locations often cost more, and they won’t have help from a partner making a mortgage payment. It’s not that surprising that low home prices and mortgage rates are more important to singles than family buyers.
Recent data from the National Association of Realtors (NAR) shows that single buyers account for roughly one-third of all buyers who bought homes—new and existing—in 2009. Single female buyers (20% of purchases) outnumber single male buyers (12%) by almost two to one.
Single female buyers have accounted for roughly the same share of total home buyers since the late 1990s. But the percentage of single male buyers took a big jump, from 10% to 12%, in the recent NAR survey.
Several sources expect big future growth in the percentage of young females who buy homes. Gen Y females are already out-earning their male counterparts, partly because they are better-educated.
Reach Advisors, a consumer research firm, analyzed Census data to find that women between the ages of 22 and 30 without children, earned 8% more than males in 47 of the 50 largest U.S. cities. Click here to watch an interview with James Chung of Reach Advisors on this topic.
RCLCO, a development research company, estimates that, within five years, women with income and no kids (so-called WINKS) will comprise 43% of all Gen Y households. RCLCO surveys indicate that WINKS prefer to live close to city centers. They want to walk to work, restaurants, and retail stores.
Boyce Thompson is editorial director of BUILDER magazine.
