TheMReport

TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Redefining "Home" The older and younger generations are distinctly different in the type of home they want. M ulti-generational homes are the preferred choice for Gen-Xers and older millennials, according to the National Association of Realtors' (NAR's) 2019 Home Buyer and Seller Generational Trends study. However, the reasons they prefer these homes are different. The study found that while Gen-Xers prefer to buy a multi- generational home because their adult children are moving in with them or never left home, older millennials who bought these homes were likely to do so to take care of their aging parents. "The high cost of rent and lack of affordable housing inventory is send - ing adult children back to their par- ents' home either out of necessity or an attempt to save money," said Lawrence Yun, Chief Economist at NAR. "While these multi-gen - erational homes may not be what a majority of Americans expect out of homeownership, this method allows younger potential buyers the opportunity to gain their financial footing and transi - tion into homeownership." For the first time, the study also divided the millennial generation into older millennials and younger ones due to the disparity in their homebuying habits. While millen - nials as a whole continued to form the largest group of homebuyers of any generation at 37% of all buyers, younger millennials accounted for 11% of all buyers while older ones represented 26% percent. The study indicated that younger millennials made up for a larger buying share than the silent generation, which accounted for 7% of all buyers. Among mil - lennial homebuyers, the study indicated that older millennials "have a median household income of $101,200 and purchase homes with a median price of $274,000, comparable to Gen-Xers ($111,100 income, $277,800 median home price) and younger boomers ($102,300, $251,100 respectively)." According to Yun, "Older mil - lennials are now entering the prime earning stages of their careers, and the size and costs of homes they purchase reflect this. Their choices are falling more in line with their Gen-X and boomer counter - parts." On the other hand, younger millennials whose median income stood at around $71,000 were purchasing the least expensive and smallest homes due to the challenges of affordability. When it came to downsiz - ing, the study revealed that this wasn't common among any of the generations at present. Sellers over the age of 54 only downsized by a median of 100 to 200 square feet as Gen-Xers and boomers who might be interested in downsiz - ing face the challenges of smaller inventory. These sellers could also "have been impeded by the increase in multi-generational liv - ing these generations are reporting to accommodate the needs of adult children and aging parents," ac- cording to the study. Homebuilders' Blocks Labor was and is a top concern for homebuilders both last year and this year. A chronic labor shortage in the housing industry is a problem that has been steadily gaining steam over the past few years, according to NAHB/Wells Fargo Housing Market Index. More than four out of five builders expect to face serious challenges regarding the cost and availability of labor in 2019, the survey revealed. The questions in the survey aimed to find the problems build - ers faced in 2018 and expect to face in 2019. Cost and availability of labor were among the top con- cerns for 82% of builders in 2018. This was followed by the price of building material. An identical 82% expect labor shortages will be their primary issue in 2019, while material prices ranked second, a concern for 69% of builders, the report stated. Only 13% of builders cited labor issues as an important concern in 2011, with the rate steadily rising over the ensuing years and peaking at 82% in each of the past three years. In his blog entitled "Top Challenges for Builders: Materials in 2018, Labor in 2019," Ashok Chaluvadi noted that, in 2011, building material prices was reported as a significant problem by 33% of builders. This share increased to 46% in 2012 and went up to 77% in 2017 before reaching a peak at 87% last year. "Compared to the supply-side problems of materials, labor and lots, problems attracting buyers were not as widespread last year, but builders expect many of them to become more of a problem in 2019. Negative media reports mak - ing buyers caution was a signifi- cant problem for 48% of builders in 2018, but 62% expect it to be a problem in 2019," Chaluvadi said. He also noted that concern about the employment/economic situa - tion was a problem for only 28% of builders in 2018, but 46% expect it to be a problem this year. Thirty-one percent of buyers in 2019 expect prices or interest rates to decline if they wait compared to 23% in 2018. Twenty-four per - cent of buyers in 2019 are unable to sell existing homes. "The high cost of rent and lack of affordable housing inventory is sending adult children back to their parents' home either out of necessity or an attempt to save money." —Lawrence Yun, Chief Economist at NAR.

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