While home affordability is improving, the process of buying a home can still feel challenging. But here’s some good news: builders are adjusting to meet the needs of today’s buyers by focusing on smaller homes and offering key incentives. These shifts could make finding a home that fits your budget a lot easier.

Builders Are Focusing on Smaller Homes

During the pandemic, homebuyers were searching for larger spaces to accommodate working from home, home gyms, and virtual schooling. Builders responded by constructing bigger homes to meet this demand. However, with affordability remaining a concern for many buyers, builders are now shifting their attention to smaller, single-family homes. Census data highlights the growing trend toward smaller new builds over the past few years.

So, why the focus on smaller homes now? Builders naturally follow market demand, and today’s buyers are prioritizing affordability. Smaller homes typically come with a lower price tag, making them more attractive to budget-conscious buyers. The National Association of Home Builders (NAHB) notes:

“Homebuyers today are seeking homes around 2,070 square feet, compared to 2,260 square feet just 20 years ago.”

Orphe Divounguy, Senior Economist at Zillow, adds:

“Cash-strapped buyers are gravitating toward lower-cost options, and developers are adjusting by building smaller homes to meet this demand.”

How New Builds Can Help You Meet Your Homebuying Goals

If you're struggling to find something in your price range, it might be time to explore newly built homes. Many builders are offering additional incentives like price reductions and mortgage rate buy-downs, which can help reduce your monthly payment. According to Zonda’s latest data, over half of builders are offering such incentives to attract buyers.

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

“The monthly payment is what matters most to buyers, and builders have responded by creating smaller, more efficient homes.”

Plus, with new construction, you’ll enjoy brand-new features, fewer maintenance concerns, and some of the latest design trends. All of this makes smaller new homes worth considering.

Bottom Line

With builders focusing on smaller, more affordable homes, you may have more budget-friendly options than ever before. If you're ready to explore these possibilities, let’s connect to find out what’s available in your area and help you take the next steps toward homeownership.