Even though home affordability is improving, buying a home can still feel like a challenge. But there’s good news: builders are shifting their focus to constructing smaller homes and offering some great incentives to buyers. These trends could make it easier to find a home that fits your budget.

Builders Are Moving Toward Smaller Homes

During the pandemic, there was high demand for larger homes, and many buyers were able to afford them. In response, builders designed bigger spaces to accommodate needs like home offices, gyms, and additional rooms for virtual schooling.

But now, with affordability still tight, builders are focusing on smaller single-family homes. Census data highlights how this trend toward smaller new homes has grown over the last few years.

So, why are builders now focused on smaller homes? Simply put, they want to build what buyers are looking for—and right now, that’s affordability. Smaller homes typically have a smaller price tag, which appeals to buyers and builders.

The National Association of Home Builders (NAHB) reports:

“. . . home buyers are looking for homes around 2,070 square feet, compared to 2,260 20 years ago.”

Orphe Divounguy, Senior Economist at Zillow, also notes:

“Not only are cash-strapped buyers continually seeking out lower-cost options, but developers are changing what type and size of home they're producing to try and meet that need.”

How a New Build Can Help You Achieve Your Homebuying Goals

If you’re struggling to find a home within your budget, consider looking at newly built homes with a smaller footprint. These homes can come with additional benefits that help with affordability, such as price reductions or mortgage rate buy-downs.

Recent data from Zonda reveals that more than half of builders are offering incentives, including mortgage rate buy-downs. These perks could help lower your future monthly mortgage payments.

John Burns, CEO of John Burns Research & Consulting, says:

“The monthly payment matters more than anything else and builders have responded with smaller, more efficient homes.”

Plus, when you buy a newly built home, you get brand-new everything, lower maintenance needs, and some of the latest features on the market. Sounds good, right?

Bottom Line

With builders now focusing on smaller homes, you could find more budget-friendly options when it matters most. If you’re considering buying a home soon, let’s connect and explore what’s available in your desired area.