Homebuilders face unique challenges as demand for new construction grows sky-high amid material shortages, lifestyle changes, and record low interest rates. See how the home-building industry is adapting as we edge into a post-pandemic world.

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The COVID-19 pandemic changed nearly every aspect of our lives, including, perhaps most notably, our relationships with our homes. Our living spaces suddenly became the epicenter of our lives, instead of simply a place we returned to at the end of the day. But as lockdown-induced restlessness set in, many people became dissatisfied with their current living situations, and the desire for new housing exploded.

For some, the pandemic offered an opportunity to save for a down payment, and with interest rates low, buying a new-construction home became more attainable than ever. "There was this confluence of a number of economic and consumer drivers that generated one of the strongest housing markets that I've ever seen in my 20-plus years," says Phillippe Lord, CEO of real estate development company Meritage Homes.

The current housing boom and the lingering effects of the pandemic have prompted enormous changes in the home-building industry, posing new challenges to the construction process. As we glimpse into a post-pandemic world, the way we live in our homes is different, and how we design and construct them is changing, too. Here are seven ways building a home in 2021 will look different than years past.

modern home exterior with gray color scheme
Credit: Kim Cornelison Photography Inc.

1. More home buyers, including first-timers, are building new.

Even as demand for housing surged, fewer people listed their homes over the past year due to health concerns amid the pandemic, Lord explains, so the resale market struggled to keep up. Erik Heuser, executive vice president and chief corporate operations officer at home-building company Taylor Morrison, notes that a lack of options nudged more buyers toward new-construction homes. According to research from Taylor Morrison, the number of home shoppers who indicated they were definitely purchasing a new home jumped to 58%, up from 48% before the pandemic.

That increase was reflected across demographics, including younger, first-time home buyers. "We saw the millennial buyer's preference for homeownership dramatically increase coming through and out of the pandemic, and we're still seeing that today," Lord says.

2. New-construction prices have skyrocketed.

Although interest rates are low, material shortages and pandemic-related shipping delays are driving up costs for new builds. The National Association of Home Builders reports that more than 90% of builders are reporting shortages of essential elements like appliances, framing lumber, and oriented strand board (OSB).

The supply of newly built homes, in general, is also down, as many builders catch up on prior commitments that were delayed when the pandemic hit, notes Brett Phillips of Texas-based design and build company High Street Homes. Combined with high demand, low supply can amount to extreme price increases. According to data from the NAHB, the median sale price for a new home has risen 18% over the past year, up to $374,400 from $317,100 in May 2020.

3. Healthy homes are more important than ever.

The COVID-19 health crisis contributed to a renewed focus on wellness, including how our homes can impact our health. "A deeper understanding of how your home helps support your wellbeing is definitely something we've seen over the past year," Phillips says. Homeowners are now looking for features like low-VOC paint and more efficient HVAC systems and insulation materials that can help improve indoor air quality, all of which are more easily found in new homes. "The energy-efficiency, health benefits, and construction techniques that we use today are just so much better than the way older homes were built," Lord says.

Charcoal gray office prints
Credit: Jay Wilde

4. Flex spaces are a must-have.

"Room usage changed and became more flexible this past year," Heuser says. "Rather than a home office only being used for work, we shifted to a mindset of flex rooms taking on various purposes, such as a gym, school room, or media room." As the pandemic subsides, remote work and distance learning likely won't be as prevalent, but having an additional living space that can be used for various activities will continue to be attractive. "If someone was previously looking for a three-bedroom house, they might now be interested in a four-bedroom because of those lifestyle changes that made having an extra room really important," Lord says.

modern home exterior and backyard
Credit: Brie Williams Photography Inc

5. New builds in the suburbs are increasingly attractive.

Remote-work policies allowed many people to ditch high-density apartment buildings and townhome complexes in the city in favor of their own place in the suburbs. "For anyone who didn't have an outdoor space during the pandemic, the idea of moving to a single-family, detached house with your own yard was extremely coveted," Lord says. Areas that provide easy access to natural beauty also became increasingly desirable. "Places where people can go outside and feel connected to nature have seen a huge increase in new construction," Phillips says.

open-concept living area with exposed beams
Credit: David Tsay

6. Some homeowners trade open floor plans for privacy.

With entire families living, working, and learning at home for more than a year, open floor plans began to fall out of favor. Even as more activities begin to take place outside the home, many homeowners are seeing the benefits of a formal layout that offers private spaces. "I think the open concept will always be desirable, but there's something really nice about having more walls to decorate and to protect sound," Phillips says. "In our homes, we like to create a separate dining space that allows you to really focus on the meal, so you're not distracted by the TV or the amount of dishes you have in the sink."

However, open-concept designs aren't going away completely. They still make sense for homeowners who like to cook and entertain, for example. "We haven't seen this big shift away from the open floor plan," Lord says. "There seems to be a preference for both depending on what serves your family best."

7. Patience is key.

Between shortages, shipping delays, and strong demand, building a home in 2021 can be challenging, and patience is key to navigating the process smoothly. "If you are about to start a project, go in with the mindset that everything is going to take longer and that you might have to shift on part of your design," Phillips says. He also suggests setting aside a portion of your budget for self-care to help ease some of the stress.

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