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Consumer Buying Trends { Demographics & buying patterns for the home } April 2014 ForResidentialPros.com | 9 A CYGNUS BUSINESS MEDIA PUBLICATION SALES OFFICES EAST/SOUTHEAST Joanne Naylor 540 Lee Court Wyckoff, NJ 07481 Phone: 201/891-9170; Fax: 201/839-9161 E-mail: joanne.naylor@cygnus.com Vaughn Rockhold 3030 W. Salt Creek Lane Arlington Heights, IL 60005 Phone: 216/272-1008 E-mail: vaughn.rockhold@cygnus.com WEST/SOUTHWEST Kim Carroll 7355 19th Avenue NW Seattle, WA 98117 Phone: 206/781-0714; Fax: 206/473-0724 E-mail: kim.carroll@cygnus.com MIDWEST Jim Philbin 3030 W. 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Salt Creek Lane, Suite 200 Arlington Heights, IL 60005 Eliot Sefrin, Publisher Emeritus E-mail: eliot.sefrin@cygnus.com Mark Taussig, Group Publisher E-mail: mark.taussig@cygnus.com REPRINT SERVICES For reprints and licensing please contact Nick Iademarco at Wright's Media 877-652-5295 ext. 102 or niademarco@wrightsmedia.com. SUBSCRIPTIONS, BACK ISSUES 1233 Janesville Avenue Fort Atkinson, WI 53538 Tel: 920/563-1761; Fax: 920/563-1704 MAILING LIST RENTAL Elizabeth Jackson Tel: 847-492-1350 ext. 18 E-mail: ejackson@meritdirect.com Web site: www.ForResidentialPros.com ® LAS VEGAS — Although the average size of newly built American homes continues to increase – reversing a trend preva- lent during the recent housing downturn – there's more to this construction/home-buying trend than meets the eye. Age, race, ethnicity and the ability to access credit are important, under- the-radar factors when it comes to buying trends for new homes. That's the assessment of a leading housing analyst for the National Association of Home Builders (NAHB), which recently conducted its annual International Builders' Show in conjunction with the Kitchen & Bath Industry Show (KBIS) in Las Vegas. Citing newly released Census Bureau data during a press conference during IBS, Rose Quint, assistant v.p./survey re- search for the Washington, DC-based NAHB, noted that the average home size has continued to rise for the past four years, from 2,362 sq. ft. in 2009 to 2,521 sq. ft. in 2012 and 2,679 sq. ft. in 2013. The share of new homes with at least four bedrooms has also been on an upward trend, rising from 34% in 2009 to 48% last year, Quint noted. Meanwhile, the percent of homes with at least three full bathrooms has increased from 23% in 2010 to 35% in 2013, and the share of homes with three- plus garages has climbed from 16% in 2010 to 22% last year. The upward trend, according to the NAHB, also applies to the percentage of two-story single-family homes started, with the share steadily rising from 51% in 2009 to 60% last year. And, as homes have gotten bigger, so has the average sales price, rising from $248,000 in 2009 to $318,000 in 2013. But to fnd out why homes are getting so big, you need to look at who is buying them, according to Quint. For example, age plays an important role in a buyer's preferences, with the amount of space requirements drop- ping steadily as the age of the buyer increases. Among those younger than 35, the desired home size is 2,494 sq. ft., com- pared to 2,065 sq. ft. among those 65 and older. Race and ethnicity also impacted home size preferences, with minority buyers desiring more space than White, non- Hispanic buyers, Quint said. White, non-Hispanic buyers report wanting about 2,197 sq. ft., while Asian buyers desire 2,280 sq. ft., Hispanic buyers want 2,347 sq. ft., while African- American buyers prefer 2,664 sq. ft. But beyond age, race and ethnicity, said Quint, the primary reason for the reversal in home sizes has to do with buyers' ability to access credit. "It requires a high credit score and a nice income to qualify for a mortgage," said Quint, who noted that the spread between the average Experian credit score of all U.S. consumers and the average home borrower's score has risen from 33 points in the early 2000s to 58 points in 2013. At the same time, Quint pointed out, the median income of new-home buyers has steadily climbed from $91,768 in 2005 to $107,607 in 2011 while, during the same period, the number of new-home sales has dramatically declined, from 1.28 million to 306,000. "There are not as many peo- ple who have the income that can qualify for the purchase of a new home," said Quint. "Due to overly stringent mortgage lending require- ments in recent years, the less financially solid buyers have been shut out of the market," Quint commented. "As a result, homes built in the last few years largely refect the preferences of those who are still able to obtain credit and put down larger down payments – typically wealth- ier buyers who can aford larger homes." MOST POPULAR FEATURES The features that builders are most likely to include in a typical single-family home in 2014 are a walk-in closet in the master bedroom, low-e windows, a laundry room and a great room, according to the latest survey by NAHB. Energy- efciency is also a key theme, as Energy Star-rated appliances, programmable thermostats and Energy Star-rated windows also rank high on the list. According to builders, granite countertops, a double-sink and a central island will likely make the cut in the kitchen, as well as a linen closet and a private toilet in the bathroom. Other features that builders are likely to include are frst- foor ceilings at least nine-feet high, a front porch, exterior lighting and a patio. On a related note, more than 70% of home buyers surveyed by the NAHB agree that contractors with specialized desig- nations are "more professional and credible" (83%); that they "provide better quality work and craftsmanship" (78%); that they "provide better service levels" (76%), and that they are "more reliable" (74%). In addition, 64% of buyers agree that specialized contractors are "worth paying a higher price for" (see related graph, above). HOME BUYERS' VIEWS OF CONTRACTORS WITH SPECIALIZED DESIGNATIONS Age, Ethnicity, Credit Issues Seen Fueling Larger Home Sizes They are 'more professional and credible' They 'provide better quality work and craftsmanship' They 'provide better service levels' They are 'more reliable' They are 'worth paying a higher price for' 83% 78% 76% 74% 64% Source: National Association of Home Builders (NAHB) KBD_8-9_BarCBT.indd 9 3/14/14 9:11 AM