Architectural Design Trends: Designing Homes for the Millennial Generation

As Millennials finally develop a sense of job security, many are opting to move from apartments in urban areas to the suburbs. What design features appeals to 20 and 30 something homebuyers?

Homes featuring passive solar energy systems appeal to Generation Y. Source: Jeff Kubina, Solar Decathlon 2007

As the generation that came of age during the Great Recession, the Millennials, the cohort consisting of 75 million individuals born between 1981 and 1997, have postponed home buying to a much greater extent than their parents and grandparents did. While the tight job market and restrictive credit environment put a damper on household formation, several other factors kept Generation Y from home purchases. In addition to the difficulty in finding employment after completing college, many new graduates who did secure jobs earned low wages that were not enough to make their student loan payments, which made taking on additional debt out of the question. Another significant factor contributing to the Millennials reluctance to enter the housing market is that many witnessed their parents struggle with mortgage payments or deal with the trauma of losing their homes through foreclosure.

Just as people who came of age during the Great Depression tended to be extremely frugal, Generation Y embraced the flexibility of renting or living in their parent’s homes. Those who chose to rent leaned toward apartments in urban centers where they could be close to employment opportunities and entertainment. By living near public transportation, Millennials avoided the expenses associated with owning a car. As 2015 drew to a close, however, 20 and 30 somethings appeared to experience a change in their mindset.

Millennials Plans to Migrate to Suburbia 2.0

Since Generation Y is the largest demographic group that even surpasses the numbers of the Baby Boomers, developers, and real estate professionals have eagerly waited to see if this cohort would start to enter the housing market. Finally, in 2015, housing sentiment surveys began to indicate Millennials had developed the confidence to buy their first homes. A finding that surprised many experts is that first-time homebuyers in their 20s and 30s are looking for homes in suburbia as opposed to the urban areas where they rented. Another insight gleaned from surveys of young home buyers is that the suburban developments that appeal to Millennials differ from those preferred by their parents and grandparents. While many people questioned whether homeownership is still the cornerstone of the American Dream, the Seattle Times reports 80 percent of 18 to 34-year-olds aspire to become homeowners.

Insights for Architects Design Homes for Millennials

One survey of 503 adults between 25 and 34 who either purchased a home or planned to do so within 12 months conducted by Pardee Homes and Builder Online provides a snapshot of what Millennials look for when searching for a home. While this age group tends to prefer living in cities when they rent a home, 53 percent report they want to buy a house in the suburbs. In fact, Gen Y is four times more likely to choose to live in areas with open spaces as opposed to high-density housing. At the same time, they want homes where they can easily walk to shops, schools, and leisure activities. They also want homes with some sort of connection with natural outdoor spaces. Of course, they also want homes at price points where they can qualify for a mortgage with an average annual household income of $60,000.

Flexible and multifunctional space is on many Millennials must-have lists when they are home shopping.

Some other clues about Gen Y’s home design preferences include the following:

• Since 35 percent of Millennials prospective home buyers plan to rent part of their homes in order to afford their mortgage payments, they look for homes with flexible spaces that can initially function as an apartment but are easily converted into living area as the family grows.
• Eco-friendly features, such as passive solar energy systems and rain sensor controlled irrigation systems are a plus for Millennial homebuyers, as long as the systems are affordable and low maintenance.
• While wifi and high-speed Internet connectivity are definitely a must have for home buyers in their 20s and 30s, smart tech gadgets need to have a utilitarian purpose. Examples of popular smart home features include remote lighting and HVAC controls.

To see how one firm used these insights in Las Vegas, visit this Fast Company Exist gallery.