At the International Builders Show

Meanwhile, new homes are getting greener and glitzier

in Orlando this week, the focus is on green homes and eye-catching designs. But what does all that mean if interest rates rise?

Builders from around the globe gathered in Orlando this week eyeing green homes and splashy designs, but rising home prices could complicate industry hopes to attract millennial buyers.

Acres of exhibition floor at the Orange County Convention Center were filled Wednesday with everything from in-home golf simulators to commodes with heated water and sanitized flush knobs. Solar panels and tankless water heaters seemed to be the new standard. A hands-free kitchen faucet operated with foot controls.

Whether the increased focus on cool, smarter homes can reverse a years-long decline in homeownership remains to be seen against a backdrop of rising costs. Metro Orlando’s population of young adults, for instance, grew 10 percent from 2005 to 2015, when overall homeownership in the region declined 6 percent.

Despite forecasts for higher mortgage bills, the home-building industry this week was optimistic about transforming millennials into owners.

“The millennials are not so young anymore and they are getting to the age where we have seen homeownership upticks in the past,” said David Berson, chief economist for Nationwide Mutual Insurance Company at a media event Tuesday in Orlando for the International Builders Show, which had an expected attendance of about 60,000.

On Tuesday, economists painted a picture of interest rates increasing at least once during the next six months and several times in the latter half of 2017. Rates for a 30-year mortgage were 4.2 percent in December — the highest for the past two years, according to the National Association of Realtors.

In Orange County, higher rates are expected to drive up the monthly cost of homeownership by about $100 a month to $1,025, according to the real estate industry group’s report on rates increasing to 5 percent.

Nationally, home prices are expected to increase 4.7 percent during the next year, said Frank

Nothaft, chief economist for CoreLogic. And while that is less than the 6 or 6.5 percent increase for 2016, it is still expected to exceed the rate of inflation, he added.

Orlando prices are expected to spike even more. In Metro Orlando, home values are expected to increase 5.7 percent during the next year — the highest rate among the country’s top metro areas, according to real estate analytics firm Zillow.

Costlier housing might be offset by several factors that could boost the home-building industry.

First, scant inventory of existing homes on the market is expected to boost demand for new homes. The core Orlando market in November had a 3.7-month supply of home listings — far below the recommended six-month level and not enough to give buyers much negotiating room.

And secondly, stagnant wages and increased jobs could also drive demand. Wages for Central Florida increased about 3.1 percent last year, with average hourly earnings of $23.90, according to a State Economic Snapshots report from October.

The key concerns for the home-building industry aren’t wages but are instead rising land costs and regulations, said Robert Dietz, chief economist for the National Association of Home Builders. Under the Trump administration, an expected environment of deregulation is likely to help the industry, he added.

Surveys show prospective buyers in their 20s and 30s want to buy homes — eventually, the economists said Tuesday.

Even with the next generation of prospective homebuyers putting off marriage and children, millennials will soon start to take a greater role driving the housing market, Berson said.

“Millennials’ interest in buying and owning have been put off for a number of reasons,” he said. “They have delayed the purchase of homes but they have not forgotten purchasing. The type of homes and location will be different, but we will likely see an uptick in homeownership soon.”