Regarding the growth of the traditional building market and its future, here's what I can tell you. Lately I've been writing about the Millennials: the largest population cohort in history, numbering 83 million—more than baby boomers, who number 73 million. Millennials account for one third of the U.S. total population.
These young consumers are approaching their most acquisitive years. Will they buy old houses and fix them up? Will they be patrons of traditional arts and crafts? Do they want to live in historic neighborhoods?
Let's look at the numbers. Millennials were born between 1980 and 2000 and will form 8.3 million new households by 2018, a 38% increase vs. 2013, according to the Demand Institute's report "Millennials and Their Homes." The average age of a Millennial today is 23. They are the most diverse, best educated, and most technologically advanced generation in history.
Millennials get married later in life. In 1950, men got married at 23 and women at 20. Now men get married at 29 and women at 27. According to Moody Analytics, their average savings rate is 2%. With new Fannie Mae and Freddie Mac first-time-homeowner loans requiring only a 3% down payment for a house, the average down payment on the average-price new house of $305,000 is $9,150.00. Considering that Millennials spend more on rent, as a percentage of their income, than prior generations, the economics of homeownership still look good to 20-somethings.
Fifteen percent of people between the ages of 20 and 34 are foreign-born. Sixty-one percent attend college vs. 46% of baby boomers. The oldest Millennials, now 35, are spending three times as much time with their children than did their boomer parents. This is particularly true of college-educated parents, according to Pew Research (2014). And according to an October 2014 report from the White House Council on Economic Policy, Millennials care most about:
- Quality of life
- Family and friend relationships
- Free time for recreation
- Working in a creative environment, having a job which is "creative"
- Making a difference in society
These facts and figures point to the Millennial generation's intentions. My conclusions are based on facts but also on intuition, shaped not only by my long history in the housing field, but also by my direct observation and conversations with these kids. (In fact, I always make a point to talk to the 20- and 30-something attendees at the Shows.)
The trendy slogan "Think Globally Act Locally" is relevant to traditional building design and craftsmanship. While we see more design influence from non-European cultures, and an embrace of cultural diversity, we also know that Millennials buy locally, whether from farm-to-table restaurants, micro-breweries or American craftspeople. They like eclectic. "Authenticity" is a hot button for them. In his upcoming column for NEW OLD HOUSE, architect/author Russell Versaci puts it this way: "The desire for authenticity is a desire for a deeper connection to the things we choose to like, to live with and to live in."
Millennials are nesters who rejoice in family gatherings. They care about good design and are creative. They work to live, not live to work, which makes time for hobbies, like collecting, or restoring old houses. They vote with their (limited as yet but growing) dollars.
Most important, Millennials shop for things that have a "story. " Where does this traditional building come from? Who designed it? Who lived there? They are cynical about anything not real, they make fun of politicians and salesmen, they double-check everything online and demand honesty from suppliers.
If you are an entrepreneur, a small business or practice, or a craftsperson for whom every customer counts, you have likely felt the 2008–2012 great recession as much as anyone. If, like me, you are a baby boomer in the autumn of your career, you might be wondering how much time you have left to fully recover from the downturn. But Millennial spending is not yet in full swing. Patience and persistence are required!
Authentic old houses with a history, as well as traditional building craft sold by the maker direct to the consumer, are what's trending with Millennials. They do aspire to having the things we build or make. It's only a matter of time before this cohort eclipses your baby boomer clientele as your best customers. The time is now to develop a relationship with them.