New homes are getting bigger, more expensive, more energy efficient, and more high-tech. That’s the consensus of Porch, a home improvement network that connects homeowners with professionals.
Porch researched housing construction trends to determine the most common features of homes built in 2016 and the most common likely features of homes that will be built over the following two decades.
Not only did Porch observe trends in physical home features, but the company also looked into home financing trends.
“When it comes to purchasing new homes, conventional loans may start to give way to other forms of financing,” Porch reported. “More than 3 in 4 new builds in 1999 were purchased using conventional home loans, but those numbers may continue to shrink into the future.”
Porch also anticipated a small increase in cash purchases alongside a notable purchase in FHA purchases.
Conventional financing accounted for 68 percent of new home purchases in 2016. That share is expected to fall to 63 percent in 2026 and to about 58 percent by 2036.
FHA financing accounted for 12 percent of newly constructed home purchases in 2016 and will rise to 14 percent in 2026 and almost 17 percent by 2036, according to Porch’s estimate.
Cash purchases made up almost 11 percent of new home purchases in 2016 and will rise steadily to 12 percent by 2036, according to Porch.
The average size of new homes will rise over the next two decades, starting at 2,559 square feet in 2016 before rising to 2,772 square feet in 2026 and then 2,985 square feet in 2036.
As homes grow in size, they will also feature extra bedrooms. As of 2016, 44 percent of new homes have three bedrooms. By 2036, that number will drop to 34 percent. Meanwhile, the share of new homes that have four bedrooms will rise from 34 percent in 2016 to 39.5 percent in 2036.
A little more than half of newly constructed homes today are two-story homes, and this trend will grow slightly over the next two decades. As of 2016, almost 55 percent of new homes were two-story. By 2036, 56 percent will be two-story.
While forced air furnaces were the most common type of heating used in new construction a few years ago, this method is falling out of favor, while heat pumps are growing in popularity. Heat pumps are present in about 40 percent of new homes today and will be used in more than 60 percent of new construction by 2036.
Fireplaces and basements are also falling out of favor, according to Porch.
List prices for newly constructed single-family homes are expected to rise from an average of a little under $100,000 in 2016 to $259,000 in 2036, Porch estimated.
At the same time, Porch anticipated more connectivity in newly constructed homes of the future, noting that, “Lennar, the largest builder of homes in America, recently became the first company to prewire its new constructions for Wi-Fi compatibility. And in May 2018, they also took smart tech to the next level by announcing Alexa, Amazon’s digital assistant, would be built into every new home moving forward.”