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  • Writer's pictureDebi Haning

The Trend of Smaller Homes: A Silver Lining in Affordability Challenges

In today's real estate market, affordability remains a pressing concern for many prospective homebuyers. The dream of owning a spacious home may seem out of reach for some, but there's a positive shift happening in the housing industry that's worth noting: builders are focusing on constructing smaller homes, offering more affordable options without compromising quality.

The Rise of Smaller Homes

During the pandemic, there was a surge in demand for larger homes. With the need for space for remote work, home gyms, and virtual schooling, builders prioritized constructing bigger homes to meet these evolving needs. However, as affordability challenges became more prominent, builders have begun to shift their focus towards smaller single-family homes.

Data from the Census highlights this shift, showing a trend towards smaller homes being built. Builders are responding to market demand, adapting to the needs and budgets of today's homebuyers. As the National Association of Home Builders (NAHB) points out, "After a brief increase during the post-covid building boom, home size is trending lower and will likely continue to do so as housing affordability remains constrained."

Why Choose Smaller Homes?

The shift towards smaller homes is driven by simple economics: builders want to build homes that will sell. With rising mortgage rates and affordability challenges, there's a growing demand for smaller, more affordable homes. As a recent article in the Real Deal notes, "Even a slightly smaller home can be thousands of dollars cheaper — for both builders and buyers. In response to affordability challenges, major homebuilders are shifting priorities away from big ticket homes and towards the cheaper set."

Benefits for Homebuyers

If you're struggling to find a home within your budget, considering smaller homes can open up new possibilities. New builds often come with additional benefits such as price reductions or mortgage rate buy-downs, making homeownership more accessible. NAHB reports that "More than one-third of builders cut home prices in 2023. NAHB expects builders to continue offering smaller homes and more affordable designs as housing affordability remains a barrier to homeownership."

Charlie Bilello, Chief Market Strategist at Creative Planning, further explains, "Homebuilders are adapting to the lowest affordability on record by building smaller homes and offering more incentives/price cuts. The median square footage of a new single-family home in the US has moved down to its lowest level since 2010."

Choosing a smaller home also means enjoying the benefits of brand new everything, fewer maintenance needs, and the latest features available in modern homes. It's an opportunity to find a home that fits your budget without sacrificing quality or comfort.

In Conclusion

The trend of builders constructing smaller homes offers a silver lining for homebuyers facing affordability challenges. It provides more options that are both affordable and well-designed, meeting the needs and budgets of today's market.

If you're considering buying a home soon, exploring smaller home options could be the key to finding a home that's right for you. Let's connect to explore what's available in our area and help you find your perfect home.


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