While home affordability is slowly improving, buying a house can still feel like a challenge. But here’s some exciting news: builders are now focusing on constructing smaller, more affordable homes, and offering enticing incentives to attract buyers. These changes could be the key to finding the perfect home within your budget.
Builders Are Thinking Smaller—and Smarter
During the pandemic, homebuyers gravitated toward larger homes, driven by the need for space to accommodate remote work, home gyms, and virtual learning setups. Builders responded by creating bigger, more spacious homes to meet this demand.
Fast forward to today, where rising home prices are making it harder for many to afford these larger properties. Builders have shifted gears and are now concentrating on smaller single-family homes. According to Census data, the trend toward more compact homes has become quite noticeable over the last couple of years.
So, why the shift? Builders want to cater to what’s selling in today’s market, and the number one thing buyers are seeking is affordability. With smaller homes usually having lower price tags, both buyers and builders are refocusing on homes with less square footage. The National Association of Home Builders (NAHB) reports that buyers now prefer homes around 2,070 square feet—down from 2,260 square feet 20 years ago.
And it’s not just about size. Orphe Divounguy, Senior Economist at Zillow, explains that developers are adjusting the types and sizes of homes they build to meet the demand for more cost-effective options.
Why a Newly Built Home Could Be Your Best Bet Right Now
If you’re struggling to find a home that fits your budget, you might want to consider newly built, smaller homes. Along with their lower price tags, many builders are offering additional incentives, such as price reductions and mortgage rate buy-downs, to make homeownership even more accessible.
In fact, data from Zonda shows that more than half of builders are currently offering perks like mortgage rate buy-downs, which can help lower your monthly payments. John Burns, CEO of John Burns Research & Consulting, notes that "the monthly payment matters more than anything else," and builders are responding by constructing more efficient homes that help buyers stay within their financial comfort zones.
Plus, new homes come with other appealing benefits: everything is brand new, maintenance needs are minimal, and you’ll have access to the latest home features and designs. It’s a win-win!
The Bottom Line
With builders prioritizing smaller, more affordable homes, you have more options that can fit your budget at a time when it matters most. If you’re thinking about buying a home soon, now’s the perfect time to explore what’s available. Connect with a local real estate agent to find out what’s on the market in your area—you might just find the home of your dreams at a price that works for you.
Comments