A recent trend in home construction points to growing polarization in the market, as more new homes come with three-car garages than ever before.
Twenty-four percent of homes built last year had garages for three or more cars, according to an analysis of Census data by Robert Dietz, chief economist for the National Association of Home Builders. That is up from 16 percent of homes in 2010, and 11 percent in 1992.
But it’s not so much that Americans want larger garages across the board. Instead, Dietz says homebuilders are increasing constructing houses for older, more monied residents, many of whom have teenage drivers and value three-, four-car garage homes.
“We’re seeing a substantial change in the mix of buyers that builders are catering to,” Dietz said. “The key point is that there has been a significant amount of weakness for entry-level, first-time buyers.”
In all, homebuilders nationally constructed 154,000 homes with three-car garages last year. That’s compared to 131,000 one-bedroom apartments and 139,000 two-bedroom apartments in the same period.
Historically, about 30 percent of new homes have been purchased by first-time buyers (who are often younger, and buy smaller, less expensive houses), Dietz said.
In the past two years, however, that number has dipped below 20 percent. Millennials are likely to rent for longer periods of time, or live with their parents, as they save money and pay off student loans, Dietz said. The people who are buying homes, meanwhile, are increasingly in their 40s, 50s and 60s.
“That means that when we think of a new home, it’s going to be larger and more expensive,” Dietz said.
The median size of a house built in 2015 was 2,467 square feet, up from 2,169 square feet in 2010, according to Census data. The median price for single-family homes, meanwhile, rose to $296,400 from $221,800 in the same period.
As home budgets rise, so does the desire for three-car garages, as Bloomberg reported earlier this week:
One of three house hunters said they preferred a three-car garage, according to a recent survey conducted by John Burns Real Estate Consulting. That compares to 51 percent, who wanted a two-car garage, and 10 percent of respondents, who said room for one vehicle was enough.
At Atlanta-based Pulte Group, one of the nation’s largest homebuilders, a spokeswoman said seasoned buyers are increasingly looking for homes with three-car garages.
“For [second-time] buyers, a 3-car garage is definitely a must-have,” Valerie Dolenga wrote in an email. “For most of these buyers, they often have a high school driver or use that third bay for storage, such as bikes and sports equipment, as well as lawn and gardening tools.”
That, Dietz added, is an important point. Surveys have found that as many as one in four Americans can’t fit their car in their garage because it’s being used for other purposes.
“Garages aren’t just for cars,” Dietz said. “They can be remodeled into living spaces, or they could be where a band or a business gets started, as in that classic California success story.”