One of the largest homebuilders in the country, Meritage Homes, recently unveiled its LiVE.NOW. homes category, which is focused on the growing first-time buyer market.
- The single-family houses will range from 1,800 square feet to 2,500 square feet, and they will be priced to start in the low $200,000s. The houses are currently available in Phoenix and Houston, with more to be rolled out soon across the United States.
Although the homes are meant to attract price-sensitive, first-time buyers, they will include energy-efficient features such as spray-foam insulation, as well as kitchen islands, pantries and granite counters.
Meritage is among the growing group of homebuilders seeking to reach the first-time buyer market following the recession as credit conditions loosen for that group and they begin to eye single-family homes and townhouses as they start or grow their families. Still, existing-home inventory remains tight in a price range that they can afford as current owners of entry-level homes delay moving up to larger properties.
According to Zillow, the average age of new-home buyers is 33. And those individuals are just the beginning of the millennial generation, with 66 million people born between 1981 and 1997. Harvard University’s Joint Center for Housing Studies expects this generation to form two million households per year over the next decade.
These numbers are making builders take notice and renew their interest in the entry-level first-time-buyer market. Meritage is rolling out its LiVE.NOW. properties in Phoenix and Houston, where tight inventory is driving housing and rental prices up. And D.R. Horton launched its Express Homes in 2014 in markets across the country. Homes priced below $200,000 accounted for 19% of sales in the U.S. in 2015, according to The Wall Street Journal, compared to 38% in 2011. Meanwhile, more expensive homes are selling more.
Today’s first-time buyers are largely looking for single-family homes in the suburbs and they’re willing to save to get what they want, according to research by Bank of America. Two-thirds expect assistance from their parents, either financially or their help moving. Nine in 10 said saving for a home is more important than saving for retirement. According to NAHB research from 2013, however, fewer than 9% of millennial homebuyers bought new homes and more than one-third purchased single-family detached homes while 9% bought multifamily property.