There’s no arguing it, affordability is still tight. And if you are trying to buy a home, that may mean you need to look at smaller houses to find one that’s still in your budget. But there is a silver lining, builders are focucsed on building these smaller homes right now and they are offering incentives. And that can help give you more options that fit the bill.
Newly Built Homes Are Trending Smaller
During the pandemic, homebuyers wanted larger homes and builders delivered. They focused on homes that were bigger, so people had more space for things like working from home, having a home gym, bonus rooms for virtual school, and more.
But with the affordability challenges buyers are facing today, builders are increasingly shifting their attention to bringing smaller single-family homes to the market. The graph below uses data from the Census to show how this trend has evolved over the last few years.
So, why the shift to less square footage? Builders want to build what they know will sell. Basically, they focus on where the demand is strongest. And once mortgage rates started climbing and consumers felt the challenges of affordability creeping in, it became clear there was a real need for smaller homes.
What This Means for You
If you’re having a hard time finding something in your budget, it may help to look at smaller homes. And, if you consider new builds specifically, you may find a few other fringe benefits that can help on the affordability front – like price reductions or mortgage rate buy downs.
If you explore these options, you’ll also get brand new everything, enjoy a house with fewer maintenance needs, and some of the latest features available. That’s worth looking into!!