We hear it over and over in real estate: affordability is increasingly becoming an issue for prospective homebuyers across the country. U.S. home prices have increased by 25% since the beginning of the recovery in 2011, according to S&P/Case-Shiller Home Price Index, while median household incomes have barely budged. Apartment rents, meanwhile, have jumped by 20% since 2010, according to data tracker Reis Inc., making it more difficult for prospective home buyers to save for down payments.
Now, home builders are trying to appeal to the group of homebuyers who are being priced out from making a purchase. We have already looked at companies that are producing low-cost starter homes for millennials in our story Will Low-Cost Starter Homes Bring More Millennials to the Market?, but there are other building companies that are taking a different approach to home affordability.
As a nod to rising housing costs across the U.S., a Las Vegas developer presented its vision of the New American Home that included nontraditional living arrangements to help ease families’ financial burdens and was designed around the concept of roommates.
The 5,200-square foot home, on a hill overlooking the Vegas skyline, includes a second-floor unit that can house aging parents or recent college grads with unstable employment prospects. If necessary, the home, constructed by local developer Element Design Build, could even accommodate two families pooling their resources.
The home was unveiled at the International Builders’ Show, the industry’s largest trade show where the latest concepts and technologies are showcased. This year affordability concerns were on display as home builders say they are seeing growing demand for properties designed to be shared with family members or roommates or even rented out to tourists.
Another home at the trade show, built by Pardee Homes, a member of the California-based TRI Pointe Group, was designed to cater to the tastes of younger home buyers in the mid-$300,000 range. It includes two guest suites that can be rented on home-sharing sites like Airbnb. Both include separate entrances and a small kitchenette and can accommodate a single person or couple in need of a roommate. TRI Pointe found that 35% of young adults want to be able to rent out space in their homes at least part-time.
“A lot of their motivation for doing that is to make the financial step of buying their home more doable,” said Linda Mamet, vice president of corporate marketing at TRI Pointe.
Brad Hunter, chief economist at Metrostudy, a construction-research firm, said builders are stepping up efforts to build such homes to “capture the zeitgeist of affordability.”
Do you think this is a smart building approach to home affordability? Would you be willing to rent out space in your home as a first-time buyer?
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