Many Americans are living in less-than-ideal houses and neighborhoods, according to “The Housing Satisfaction Gap: What People Want, But Don’t Have,” a recent report from The Demand Institute.
The survey revealed America's top 10 unfulfilled housing needs and desires by polling more than 10,000 households—renters and owners across generations and income levels—to establish the gap between what people think is important in a home and what they actually have.
“The biggest overarching thing is that when it comes to their homes, there are still a lot of things that Americans want to improve,” says Jeremy Burbank, vice president of The Demand Institute. With over 40 million U.S. households set to move in the next five years, spending $7.4 trillion on home purchases, builders have a major opportunity to create the homes that potential buyers are looking for.
While ownership has been down and renter households have grown, that doesn’t necessarily reflect a lack of interest in buying so much as a lack of financial means. Seventy-seven percent of respondents to The Demand Institute’s survey still view home ownership as an excellent investment. And the report’s findings support that aspiration.
“There’s a desire for things like more space, privacy, and safe neighborhoods that are often attributed to single-family homes and ownership,” says Burbank.
Wanted: Modern Homes
The top satisfaction gap regards energy efficiency, with 71 percent of respondents ranking it as important and only 35 percent satisfied with their current home. Americans’ home electricity spending has increased 56 percent since 2000, so it’s no wonder that many people are looking for ways to lower their utility costs.
This is one area where new construction has an advantage, Burbank says, since newer homes are typically more energy-efficient than older ones due to improvements in building science and construction products.
“We also see a lot of interest in things like home energy-use monitors, smart home thermostats—things that better empower consumers to understand how they use energy and reduce their energy usage,” he adds. Options like smart home technology and high-efficiency appliances offer a chance for builders to distinguish themselves, both from their competitors and from existing stock.
Other top desires indicating an advantage for new homes include houses that require little to no renovation, updated kitchens with modern appliances, and more storage space—key design areas for builders to focus on.
Many buyers will also be looking for homes that are suitable for aging in place. According to the report, 76 percent believe a home they can stay in as they get older is important, but only 53 percent feel that their home meets that criteria. Among Baby Boomers, those who are planning to move are interested in single-story homes, but not necessarily in decreasing square footage, Burbank says.
Seeking the Essentials
It isn't surprising that many people see opportunities to upgrade—who doesn’t have a home improvement wish list? But some items in the report indicate a more troubling lack of housing fundamentals.
Affordability continues to be a problem: 26 percent of owners and 40 percent of renters now spend more than 30 percent of their income on housing expenses. The report found that approximately one in five Americans is unsatisfied with the cost of their current living situation.
“There’s certainly a well-documented shortage of affordable housing, particularly when it comes to renters, and the situation is only getting worse,” says Burbank. Both single-family and multifamily developers should look for innovative approaches to fill this need and bring more affordable units into the marketplace, possibly utilizing public-private partnerships, he adds.
Safety is also a concern, with 22 percent of survey respondents unsatisfied with their current home. About one-fifth, 65 percent of whom are in non-urban areas, feel their neighborhood has become less safe in recent years; a surprising finding, given that crime rates have been falling since the 1990s, Burbank says. This presents a market for improved home security systems, with an increasing number of home owners likely to turn to advanced technology for peace of mind.