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A Solution to The Affordabiilty Crisis? The Affordable Millennial Dreamhouse

Photo via Pardee Homes

Housing aspirations are evolving. A huge surge of households 60 years and older combined with the influx of millennials to the housing market is going to drive demands from both ends of the market.

The national homeownership rate is below 64 percent, which is historically low, after peaking at 70 percent during the 2005-2006 housing boom. The progress of millennials into the housing market has been delayed by the recession. There are strong concerns that buying a home is risky because of price fluctuation. 

In designing homes, there is a need for flexibility to make it financially plausible for millennials to afford ownership. That means a lower price point and space to rent out while the millennial buyer builds equity.

One solution is the “responsive home” built in Henderson Nevada as a collaboration between TRI Pointe Group’s Pardee Homes and Hanley Wood’s Builder Magazine.

There are two concept homes with designs based on a survey of 503 25-34 year olds with a household income of at least $60,000 who intend to purchase a home in the next 12 months or already own one.

The houses are a 2,130 square feet contemporary farmhouse and a 3,200 square foot contemporary transitional, which emphasize “nostalgia with a fresh twist- solar panels”. Over 50 percent of survey applicants want the urban experience in a suburban setting. These homes are designed for a household income of $75,000 a year assuming a 5 percent down payment $8—a month in student debt – a monthly mortgage payment of under $2,000.

Contemporary Transitional Home via Pardee Homes

Contemporary Farmhouse via Pardee Homes

With equity and financial readiness a major issue, 35 percent of survey respondents planned to rent out part of the home to meet mortgage payments. So, the second master suite has a kitchen and there is a “lop-off” suit that can also be an enclosed living space.