Creating better, more livable homes that prioritize wellness and work from home
BY DOMINIKA KOWALSKA
Nobody really knows what exactly Covid-19 will bring for the building sector. All I know is, it will be revolutionary because it will happen on a global scale.
Home Sales Market Data
Freddie Mac’s recent Primary Mortgage Market Survey (PMMS) shows the 30-year fixed-rate mortgage (FRM) dipping into alltime- low territories, averaging at 3.24%. A year ago at this time, the 30-year FRM averaged 4.06%. It seems like a perfect time to get that mortgage and buy a house for those who have money saved, good credit, and have managed to hold on to their job.
According to Zillow, sales of new homes rose 0.6% in April from March, crushing expectations for a ~23% monthly decline. Zillow’s April Real Estate Market Report has revealed that the for-sale market continues to show momentum, with newly pending sales up 13% week-over-week, and nearly 50% monthover- month as of the seven days ending May 10. However, there choice is much narrower, with total inventory dropping 20% below last year’s level. It turns out people want to buy and live in their own homes during and post-covid, but the building industry cannot keep up.
According to Realtor “Millennials are now purchasing primary homes (with mortgages) that are the same price as baby boomers’, but they are also taking on larger loans due to low down payments.” By the week ending April 11, 2020, the Millennials’ share of primary home purchase loan originations grew to 53 percent from 49 percent during the same time last year. The Generation Z share grew to 3 percent from 1 percent during the same time last year. Realtor continues, “In April, the typical millennial contributed a down payment of 7.8 percent toward the purchase of their home, down from 8.8 percent last April, and less than the 11.6 percent and 17.8 percent contributed by the typical Gen X-er and boomer, respectively. Worryingly, after a slight rise in the average down payment percent from Millennials’ in 2018 and 2019, the rate has been falling since January 2020.”
Post Covid-19 Trends
An interesting housing trend that could could come out of Covid-19 and by extension, popularization of remote work, is desirability of suburbs. According to Zillow, “among employees who would be likely to consider moving if given the flexibility to work from home when they want, 31% said they would consider moving in order to live in a home with a dedicated office space, 30% said they would move to live in a larger home and 29% said they would move to live in a home with more rooms.”
Six perks I can think about are: low home prices and bigger homes, availability of backyards where people can plant their own food in case of another shortage (some may regret that we can’t plant toilet paper…), less density makes suburbs safer during future pandemics, fresher air, less crime, much better place to raise a family and become a pet owner.
Another trend might be popularity of smaller but smarter, better designed spaces. Millennials cannot afford McMansions so loved by Boomers, nor they want to own and maintain one, leaning more toward eco-friendliness (the bigger the house, the less green it is), but they do want the multifunctionality of a home, where they can work, live, raise a family, relax, and host guests.
The work from home spaces will become must-haves, and homes will be zoned into work-play-live and rest areas. As Michael Stone points in his column, the builders will need to “create a work-at-home place for the parents that is close to the remote learning space needed for kids.”
Architects and interior designers also noticed an increased demand for installing in-ground swimming pools, because they don’t want to go to public facilities anymore, and adding more backyard facilities for entertaining guests.
Stuck-at-home Americans noticed that their homes could use a new, fresh touch, and started redecorating their homes by ordering furniture online, and by extension, rebuilding furniture companies like Wayfair. The company’s stock has been dropping for a long time, and dropped to $22 by mid-March. By May 11th (after the stimulus checks arrived to the majority of households), their stock sold for $190, an all-time high.
Those who decided to remodel during the pandemic, added more wellness features to their homes. Taking care of air and water quality and adding anti-bacterial, antimicrobial, easy to clean appliances in homes became a priority.
Dominika Kowalska is an Assistant Editor for Builder and Developer Magazine. She June be reached at email@example.com