The New American Home is Shrinking

Home prices are getting ‘out of reach.’ One solution: Build them smaller.

Newly built homes are shrinking in size as America’s homebuilders try to lure buyers seeking more affordable options in a high-interest-rate environment. Prices are just so out of reach for consumers that builders are trying to figure out ways to make it realistic for consumers to purchase the house, and decreasing square footage is one of the ways to get there.

The biggest US homebuilder, D.R. Horton, recently said the average square footage for homes closed in its most recent quarter was 1,980 square feet, down 2% from the same quarter last year.

Building smaller has become a means for builders to capture first time homebuyers who are struggling to purchase homes amid elevated borrowing costs and low housing inventory, as homeowners with cheaply financed properties remain reluctant to sell. Smaller home sizes allow builders to keep prices lower.

Townhouses have become more popular because as all builders know it’s less expensive to build up then out.  To cut costs, companies are building smaller and taller, with fewer windows, cabinets and doors.To ensure that the dream of homeownership remains within reach for all, it’s time to embrace the concept of smaller homes. If you’re considering building smaller homes, let Blender Realty provide you with market intelligence that will ensure your next project is successful.

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