When it comes to affordability, Millennials are willing to go the extra mile, literally.
Nearly 90% of Millennial homebuyers told Redfin that they would choose a single-family home over an equally priced unit in a triplex with a shorter commute.
“Even as we’ve seen a revival in many urban neighborhoods, the American ideal of a detached home with a white picket fence and a private lawn doesn’t appear to be changing—at least for the time being,” said Redfin Chief Economist Daryl Fairweather.
Redfin found that the price of single-family homes over condos is declining in expensive areas, and increasing in affordable inland areas, highlighting a dichotomy between the two.
“This is another way America is dividing between coastal cities and the more affordable heartland,” Redfin CEO Glenn Kelman said. “All else being equal, almost everyone would prefer a house over a condo, and that preference is only getting stronger in most parts of America. But in the big city, that preference is actually getting weaker.”
In some cities, like New York, living in condos or apartments is the norm, but that’s not the case in other markets.
“As more folks move from San Francisco or New York in search of that house with a white picket fence, the ones left behind will be those most comfortable with life in a condo or townhouse,” Kelman said. “The question now becomes whether cities in the middle of a transition from affordable to affluent, like Minneapolis, Seattle, Portland, Austin, Nashville, and Charlotte can use local zoning laws to shift their citizens’ preference for single-family homes, so that it becomes less, not more, strong over time—or if people will shift away from them.”
Meanwhile, it’s getting more attainable in some cities to choose a home over a condo.
According to the Redfin report, in many expensive metro areas, the price premium for single-family homes over comparable condos—those with similar square footage, number of bedrooms and bathrooms and location, among a few other factors—has “dropped meaningfully” since 2013.
But buyers still prefer single-family housing.
Of the Millennial homebuyer base, 93% said they would choose a single-family home. Overall, more than 85% of homebuyers and sellers said they preferred single-family homes over multifamily housing.
“While some cities and states like Minneapolis and Oregon are aiming to create more affordable multi-family housing options by eliminating single-family zoning, as long as Americans are willing to pay a premium for detached homes, developers are likely to continue building them,” Fairweather said.
And buyers, especially older buyers, are willing to tolerate a longer commute in order to get that house of their dreams.
“Although the share of homebuyers limiting their searches to single-family homes has shrunk over the last seven years, that’s likely due to rising prices rather than homebuyer preferences,” the Redfin report stated.
“Our research indicates that the vast majority of homebuyers and sellers would prefer a single-family home over a unit with shared walls, assuming the price is the same,” Redfin continued. “Just one out of every 10 prospective homebuyers and sellers would prefer a unit in a triplex with a short commute over a comparable single-family home farther away from their job. Nearly 90 percent of homebuyers would prefer a single-family home.”
More than 85% of Millennials, Gen X, and Baby Boomers all said they’d deal with a longer commute for a single-family house. Meanwhile, just 58% of Gen Z said they want a single-family house instead of similarly priced condo.
“Nearly half of the under-25 set would prefer a unit in a triplex over a single-family home with a private backyard,” Redfin stated. “While the youngest survey respondents’ sentiment could suggest that overall housing preferences will indeed shift away from single-family homes in the decades to come, it may be just as likely that their housing preferences will change as they start families.”