Smaller Homes, More Chances: A Homebuilding Trend Buyers Embrace

It's well-known that it's hard for some first-time home buyers due to current mortgage rates and home prices. This might make you feel anxious about buying a home. If you don’t need a lot of room, you might discover cheaper options in new housing developments.

Builders Are Designing Smaller Houses

Buyers are now looking for smaller homes because they usually cost less. As a result, builders are concentrating on building more of these smaller homes to meet this demand. According to U.S. News:

“The combination of higher home prices and mortgage rates has strained a lot of people's budgets. And that's something builders recognize. To this end, they may be leaning toward smaller spaces . . .That, in turn, can lead to savings for buyers.”

Census data shows that in the past few years, builders have been moving towards smaller, single-family houses (see the graph below).
 

The graph shows that the average size of a new home decreased from 2,309 square feet in the third quarter of 2022 to 2,171 square feet in the third quarter of 2024. That's a change of 138 square feet.

In the end, builders want to create homes they know people will buy. Homebuyers are currently most interested in cheaper choices to deal with today's affordability issues. As mentioned by Multi-Housing News:

“The growing trend toward smaller homes is evident. These homes are less expensive to build and more attainable for many middle-income families, meeting both housing needs and modern lifestyle preferences.”

The Benefits of These Brand-New Homes

If you're struggling to find a home you can afford, consider looking at newly built smaller houses.

Newly built houses need less upkeep, come with modern features like energy-efficient appliances and heating and cooling systems. That’ll help you save on repair costs and your monthly energy bills. Now this sounds like a win-win doesn't it?

In Conclusion

Today’s builders are concentrating on smaller, more affordable houses. That could help you find something that suits your budget better. If you're looking to buy soon, let’s connect to explore what's on the market in your area and get your homeownership goals over the finish line.

References:

Backman, M. (2024, October 15). Are Homes Getting Smaller? U.S. News Real Estate. Retrieved January 23, 2025, from https://realestate.usnews.com/real-estate/articles/are-homes-getting-smaller

Hamzanlui, E.  (2024, September 11). Let’s Build the Right Kind of Housing. Multi-Housing News. Retrieved January 25, 2025, from https://www.multihousingnews.com/lets-build-the-right-kind-of-housing/

U.S. Census Bureau & U.S. Department of Housing and Urban Development. (2024). New residential construction. In U.S. Census Bureau And U.S. Department of Housing And Urban Development. https://www.census.gov/construction/nrc/pdf/quarterly_starts_completions.pdf