Discover The Newest Trend in Home Building

How Builders Are Adapting for Better Affordability

Buying a home might still feel challenging due to affordability issues. However, there’s good news for all prospective home-buyers. Builders now focus on building smaller homes, presenting a unique opportunity for budget-conscious buyers. They’re also offering a range of incentives, making it even easier to find the perfect, budget-friendly home.

Builders Are Constructing Smaller Homes

During the pandemic, the demand was for larger homes that could accommodate work-from-home settings, home gyms, or extra rooms for virtual schooling. Many could afford these homes, and builders catered to this demand.

However, the scenario has changed. With affordability still a significant concern, builders have shifted their focus to smaller single-family homes. Data from the Census indicates a trend towards smaller new homes in the past few years. (see graph below)

But why this sudden shift towards smaller homes?

The simple answer is market demand. Builders aim to construct homes that will sell, and right now, the market is demanding better affordability. Smaller homes usually come with more petite price tags, and this shift is just what budget-conscious buyers need.

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, adds,

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

How a Newly Built Home Can Help You Achieve Your Home-buying Goals

For those struggling to find an affordable home, it may be time to consider brand-new, smaller-footprint homes. Along with affordability, these homes come with many benefits – like price reductions or mortgage rate buydowns.

Zonda’s recent data reveals that over half of builders now offer incentives like mortgage rate buydowns, which could significantly reduce your future monthly housing payment. John Burns, CEO of John Burns Research & Consulting, explains,

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

Moreover, a new home implies brand-new facilities, fewer maintenance needs, and the latest features—all the more reason to consider these options, right?

Bottom Line

Builders’ focus on smaller homes means more budget-friendly options when it matters most. If you’re thinking about buying a home, it’s the perfect time to explore what’s available where you want to live. So, let’s connect and help you find an ideal home for your budget.