Homebuyers today want large, open floor plans, but few existing homes on the market can meet that demand, according to a survey from the National Association of Home Builders.
While more than half (51%) of buyers are seeking properties larger than 2,000 square feet, just 41% of existing homes today fit the bill compared to 70% of new single-family homes. It’s not just floor plans. The survey found that 44% of buyers are seeking homes with more than two bathrooms, something 31% of existing but 68% of new properties can offer.
- Meanwhile, more buyers (38%) want partially open kitchen-to-family room transitions than the number of builders (30%) constructing their homes that way. Instead, more builders (54%) design completely open plans linking the kitchen and family room than the share of buyers (32%) seeking that style.
While new construction is better-suited to meet homeowners' demands for large, open plans, the market has been slow to deliver the necessary inventory.
Single-family housing starts dipped 4.1% from October to November to a seasonally adjusted annual rate of 863,000 as the overall housing market continues its uneven rebound. Meanwhile, existing-home sales are climbing, as rising interest rates spur trade-up sellers on the fence into action.
Still, inventory is tightest where it’s needed the most. The number of for-sale homes targeting typical first-time buyers fell 12.1% year-over-year during the fourth quarter, according to Trulia, while buyers in that category spent 1.9% more of their income on median-priced housing during the period.
Rising prices, higher rates and low levels of housing stock all have builders confident in the demand pipeline. In December, the NAHB/Wells Fargo Housing Market Index posted its highest mark since July 2005 with a score of 70 and with sales expectations for the next six months even higher.
On the design side, demand for open plan homes is generating activity in the repair and remodeling sector. The latest NAHB survey cited data from the organization’s first-quarter 2016 Remodeling Market Index, which found that 40% of projects during the period concerned removing features like interiors walls, arches and pillars to open up plans.
As some degree of barrier-free interiors grow in popularity, the spaces they entail are becoming larger. In a report this week from Houzz, one-third of respondents to a recent survey said they are making their kitchens bigger with more than half (51%) opening to another room and two in 10 opening to the outdoors.
The desire for larger, centrally located kitchens within the home is turning the once-utilitarian room into a gathering space. Builders and buyers are responding with higher-end finishes and a natural color palette. In October, the NAHB reported that granite countertops (64%), wood cabinets (85%) and stainless steel (79%) appliances were among the most popular selections for the kitchen.
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