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Sustainable Home Features Gain Ground in the Housing Market

Sustainable Home Features Gain Ground in the Housing Market
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Home.com Staff

About two-thirds of all consumers and 75% of millennials consider environmental sustainability when they make a purchase, according to a 2020 survey by McKinsey & Co. But does that eco-consciousness extend to the biggest purchase most people will ever make?

According to a National Association of Realtors® (NAR) report, half of agents helped buy or sell a property with green features last year, up from 22% last year. Another 51% reported that clients were interested in sustainability.

This comes as 35% of Realtors® said clients were some degree of anxiety over the effects of climate change and weather on the housing market.

“Sustainability continues to play a growing role in consumers’ purchasing decisions, and this is becoming even more prevalent in the real estate market,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “With the residential property market, in particular, home buyers have expressed increased interest in eco-friendly factors like solar panels and energy efficiency.”

In the real estate market, interest translates to money and higher home values. Sixty-three percent of Realtors® said energy efficiency promotion was at least somewhat valuable in listings, while just 11% said it was not valuable.

Quality windows, doors, and siding – which can minimize heating and cooling costs – ranked as the most important home feature with 84% saying it was important. Proximity to frequently visited places, utility bills, and commuting costs also ranked in the top 5.

Green features such as energy efficient lighting, landscaping for water conservation, and renewable energy systems actually lost a little ground from last year’s report. However, this may reflect a greater emphasis on affordability as home prices and mortgage rates rapidly increase housing costs in 2022.

Solar panels – perhaps the most notable green feature – are most prevalent in the West and Northeast and have the greatest effect on property values in the West.

NortheastMidwestSouthWest
Energy efficiency promotion is valuable65%64%61%61%
Rooftop solar panels in market86%75%71%89%
Rooftop solar increases value34%32%33%48%
Rooftop solar does not affect value32%31%29%30%

Given millennials’ increased interest in climate and sustainability, it will be interesting to see if green features continue to become more prevalent and valuable as they command more of the housing market.

“More sustainable homes bring benefits to homeowners like cost savings from energy efficiency, health benefits from improved indoor air quality, and increased comfort and durability from material use and construction, and may also increase resale value,” said Jessica Lautz, NAR vice president of demographics and behavioral insights.

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