More and more millennials are buying single family homes outside the city limits due in part to urban centers reaching “peak millennial” as stated by Professor Dowell Meyers of USC. Many of these rural homes are older - something that can make the purchase more affordable, along with mortgage rates that are still near 40-year lows. However, aging homes often need upgrading and are not nearly as energy efficient as compared to newer construction. This makes new technologies which can help tailor and personalize energy for residential users a very intriguing growth opportunity for energy companies and entrepreneurs to focus on especially if they are looking to capitalize on the growth in the Internet of Things (IOT) and the convergence of the connected car and home (something further validated by Tesla’s acquisition of SolarCity - see press release.
Adding ENERGY STAR lightbulbs, better insulation and air sealing can help drop total energy costs by 11% but this should be a no-brainer for homeowners at this point. Beyond that, we need more solutions to help use less energy. Engaging with younger customers in new ways, especially through two-way communication tools can allow millennials, a generation that absolutely can’t live without technology, the ability to cut home management costs and be more in control of when and how they consume energy.
According to the National Association of Realtors (NAR), millennials were the largest group of recent home buyers (35% vs 31% for baby boomers, 26% for Generation X and 8% for the Silent Generation, those born from the mid 1920s to the early 1940). So there should clearly be a greater focus on energy technology and how it can help future homeowners cut costs. Considering millennials for the most part are typically making first-time home purchases, they are largely tapping their savings to secure their down payments, but not for pricer newer homes.
Millennials don’t mind fixer-uppers but credit is still certainly an issue thanks to unprecedented student loan debt. Borrowing money remains tight these days post the housing crash - another reason the allure of older homes is even more palatable to millennials. This should make student loan figures more important than ever when gauging the pulse for the housing market.
Energy is a dominant monthly expense - in fact, it’s a top expense along with mortgage payments, food, healthcare and transportation. If millennials find home buying a safe long-term investment (and it appears that’s exactly the case), then how they perceive energy and the potential demand savings they can monetize or reap from a more dynamic grid that can better manage wind, solar, energy storage and smart technologies, must collectively be presented in ways they can actually understand and benefit from. That’s how millennials can ultimately zap residential energy costs and help make home ownership more affordable - oh yeah, and slash CO2.
Think energy technology will or won't help millennials afford home ownership? Please share your thoughts here - this is certainly an evolving conversation.