What Builders are Doing to Attract First-Time Buyers to New Homes

Design innovations for millennials & generations to come

Market research shows prospective home buyers in the coming decade, particularly millennials, are looking for flexibility and affordability as they enter the housing market.

“The bulk of demand for millennials and for all ages is in the $200,000 to $400,000 price range,” said Paige Shipp, a regional director for Metrostudy in Plano, Texas. “Fifty-two percent of millennial homebuyers choose newly built homes rather than resales.”

Some of the most innovative ideas at the 2019 International Builders Show (IBS) came from builders focused on developing “attainable” homes at an affordable price range for entry-level buyers among millennials and generations that follow them.

These ideas address the changing demographics of the nation. In 1970, 40 percent of households had a nuclear family with parents and their children. Today, just 20 percent of households are a nuclear family, according to Making Room: Housing for a Changing America, a recent exhibit at the National Building Museum in Washington, D.C.

Households today are just as likely to have a single parent, a multigenerational household, or a single adult. Thirty percent of households consist of a single adult, 32 percent of young adults live at home with their parents, and 27 percent of children live with a single parent. All those demographic changes, along with the fact that 22 percent of Americans will be over 65 in 2050, influence future home designs.

Design Innovations for the Next Generation

Among the ideas that could increase affordability and match buyers’ appetite for flexibility are:

Modules to Buy Now and Add Later

In recognition of changing demographics as well affordability issues, Module Housing has developed a handful of home designs that can be built on a small city lot and grow with the homeowners, said Brian Gaudio, CEO of Module Housing in Pittsburgh.

“The idea is to buy only the amount of home that you need today, even just a one-bedroom, one-bathroom module,” he said. “When you need more space, you can add a module for extra living area without the expense of moving or a major remodel.”

Module Housing has four plans, with the largest starting at three bedrooms with two bathrooms and 1,600 square feet. That model can be expanded with more modules to more than 2,500 square feet. Even in its smaller configuration, the design has enough room to house a family and accommodate guests. The standard versions of the module homes are priced from $149,000 to $290,000 not including the foundation or sitework.

Income-Producing Home Additions

To increase affordability for homeowners, and increase the supply of affordable housing, builders introduced designs that include rentable space. They also offer the option of adding an accessory dwelling unit (ADU) in the future.

The KB ProjeKt Home in Henderson, Nevada, showcased at IBS 2019, has a unit on the second floor that can be part of the main house or locked-off as a separate home for an adult child, the owners’ parents, live-in help, or as a rental unit. This section of the house has a deck, a private entrance, a kitchenette, a bedroom, a full bathroom and a living area, making it a fully functional, mini-home.  

The Module Housing designs also include a module that can be used as an ADU for rental income or incorporated into the rest of the living space.

Flexible Structures

 Flexibility is a key desire of modern homebuyers, who want to be able to use their space in a variety of ways, and adjust their living space for future needs, according to Metrostudy’s research.

At the KB ProjeKt house, moveable walls and flexible furniture options allow spaces to function as a bedroom, an office, a studio or an entertaining space at any time.

“The walls move at the push of a button,” said Jacob Atalla, vice president of sustainability for KB Home in Los Angeles. “The furniture is flexible and easy to use, too, so you can have more or less counterspace or table space in the kitchen depending on how many people are using the kitchen.”

In Module Housing’s Moonlighter model, the first-floor home office can be outfitted with a Murphy bed for easy conversion into an occasional guest room.

Researchers at Virginia Tech won several awards at the 2018 Solar Decathlon Middle East with their FutureHAUS project, which includes moveable walls to create different floor plan configurations.

“A wall can slide to make the bedroom larger or smaller depending on whether you’re entertaining in the rest of the house,” said Joseph Wheeler, a professor of architecture at Virginia Tech in Blacksburg, Va.

Off-Site Construction

The FutureHAUS included prefabricated cartridges built in Virginia and shipped to Dubai for the Solar Decathlon where it was assembled in one day, said Wheeler. The cartridges, including a kitchen, a bathroom, a living room and bedrooms, are built with appliances, wiring and technology in place before they’re shipped and snapped together.

Similarly, the modules for Module Housing’s homes are built off-site.

“Building off-site in a factory increases affordability in part because it provides a solution to the chronic labor shortages in the construction industry,” said Gaudio.

KB Home’s ProjeKt house was also built primarily off-site using Building Information Modeling (BIM) technology, which reduces wasted resources and results in a house with greater energy-efficiency.

Net-Zero Energy-Efficiency

Newer building techniques, better insulation, and energy-efficient appliances give newly built homes higher levels of energy-efficiency,

All of Module Housing’s homes will be net zero homes, meaning they produce as much energy as they use. The goal for the KB Home ProjeKt house and other newly built homes is to surpass net zero energy to become net positive energy, meaning that more energy is generated than is needed by the household, said Atalla.

Flexibility, affordability and sustainability are all important concerns that these innovations aim to solve for homebuyers of the future.