Homes are currently being designed with an eye toward affordability due to the decline in house prices in recent years in most areas of the country. Still, many households are willing to invest in home features, systems, and products that promote greater energy efficiency and accessibility throughout the home. Even with the general downsizing of homes, residential architects are reporting growing interest in outside living spaces, home offices, and mud rooms, according to the AIA’s Home Design Trends Survey for the second quarter of 2010. Almost 300 residential architects were surveyed on emerging design preferences of households.

Meanwhile, residential architecture firms reported a softening of business conditions at their firms during the second quarter, a trend that held for firms in every major region of the country. Project backlogs (the amount of design work currently in-house) remain very low. By construction sector, homes priced at the lower end of the price spectrum are doing somewhat better, while second homes and vacation homes remain the weakest sector. Remodeling projects are reported to be growing at a healthy pace according to residential architects. 

Upscale out, home office in

The precipitous decline in house prices over the past five years and the resulting growth in the number of homeowners with delinquent mortgages or mortgages in foreclosure has dramatically changed the way that households are making decisions, as well as using the space within their homes. So, for example, when we asked residential architects for the most popular special function room in homes at present, very few mentioned previously popular upscale examples.

Special function rooms that remain popular include home offices, outdoor living spaces, and mud rooms. Home offices appeal to telecommuting workers as well as to the growing number of individuals who work exclusively out of their home. Outdoor living areas and outdoor rooms reflect the growing interest in expanding the household’s living space into the outdoors. Interest in mud rooms reflects the need for additional closets and other storage space, as well as the increasing informality of space in the home.

With the downsizing of homes, special function rooms have been disappearing. For media rooms/home theaters, exercise/fitness rooms, hobby/game rooms, home workshops, kid’s wings/guest wings, interior kennels, and interior greenhouses, a growing share of residential architects responding to this survey indicated that interest in these spaces was declining. This leaves only a few examples (notably outside living areas and home offices) where there was general consensus among residential architects that interest among households is increasing.

Special features that promote accessibility through the home include a first floor master bedroom, ramps and elevators, and easy-to-use features like handles and faucets, and nonslip floor surfaces. These features are still reported to be increasing in popularity by a minority of respondents, but the share of residential architects reporting an increase in popularity of these projects has uniformly fallen over the past year.

Business falters in second quarter

Since hitting a low at the end of 2008, business conditions at residential architecture firms had been making steady progress toward recovery. In fact, in the first quarter of this year, residential architects reported a small increase in billings, the first quarterly increase since mid-2007. However, the second quarter showed a reversal of this trend, with a billing score just under 41, down from a score of just over 50 in the first quarter. A national billings score of 41 indicates that more residential architecture firms reported a decline in billings in the second quarter than reported an increase, so that in total, billings at residential architecture firms declined. In all likelihood, the softening of firm billings at residential architecture firms reflects the general weakness in the economy during that quarter, and the home buyer tax credit expired at the end of April.

The national downturn in billings at residential architecture firms has affected firms in all regions of the country. In the second quarter, the billings score was below 50 for every major region, ranging from a low of 35 in the South to a high of 47 in the Northeast. In general, the South and West regions that had seen stronger levels of residential construction activity prior to the downturn are currently seeing weaker billings conditions at present because they had a higher base to fall from. Also, the Northeast and Midwest have a higher share of home improvement activity, which at present is the strongest residential sector.

Residential architects report that home improvement activity is growing at a fairly healthy rate. Both kitchen and bath remodels and additions and alterations to existing homes have healthy sector scores with this survey, with kitchen and bath remodeling having increased from its reading of a year ago. Without an overbuilding problem like in the new construction market, home improvement activity has been able to stage a healthier recovery than new construction. Click here to see the full AIA report.