More than 600,000 home sales were made to first-time homebuyers in the first quarter of 2017, marketing the strongest first-time home buyer performance since 2000, according to a report by Genworth Mortgage Insurance. First time home buyers accounted for 40% of all new home sales in this period. Homes for buyers of modest means, generally in the $200,000 to $250,000 price range, rose 20% year over year, and the demand for the next step up, attainable housing, is even greater.
However, escalating land costs, as well as a shortage of construction labor, have made new homes harder to build at either level – and the resale market is far from able to meet the demand from younger buyers. “The Great Recession was very damaging to millennials,” explains Arthur C. Nelson, a professor of planning and real estate development at the University of Arizona. “It probably set them back a decade in terms of income and ability to purchase a home.”
Many builders, developers, and tech companies have innovated on the traditional construction, sales, and development models in order to cut costs and meet the needs of the millennial middle class. Urban Land’s Patrick J. Kiger highlights Brookfield Residential Easton Park, TRI Pointe’s Responsive Homes, and EYA’s Westside at Shady Grove Metro, among others.
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