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New Homes being built are smaller - that is what some buyers want - but will they be more affordable?
Rose Quint, Assistant Vice President with the National Association of Home Builders says that average new home sizes are the smallest they have been in years. The average for a new home last year was 2,411 square feet - the smallest in 13 years. Affordability is a big driver behind the move to building smaller new homes.
The average number of people living in a home has been trending downward for many years. 1980 average was 2.76, now its 2.51.
New home prices have increased dramatically over the last few years and the trend toward smaller homes is driven in large part by a desire to make homes more affordable - especially for first-time home buyers.
Mike Dishberger CEO of Sundance Homes and 2023 Greater Houston Builders Association President says builders in certain parts of Houston are building smaller homes in response to demand from first-time home buyers that are focused on affordability. Empty Nesters are also interested in downsizing into smaller homes. However, he sees some homeowners that have equity in their existing homes in some cases being interested in trading up into larger homes.