Rising Home Prices Have More Buyers Thinking Small | Global News Avenue

There is a great demand for smaller houses.

House Price Continue to move higher even though Sales staggermaking smaller homes sought after among buyers seeking affordability.

Meanwhile, builders are building smaller homes (although maybe not as much as we need, but some economists say – demand for townhouses is rising.

Typical new homes have been shrinking since 2015 as housing affordability has been extended.

Data from real estate agents nationwide show that the median listed homes in 2024 fell to 1,791 square feet from nearly 2,000 square feet in 2019.

Similarly, Census Bureau data shows that while the last quarter of 2024 rose, the typical new home size trend is lower.

The median homes have dropped from 2019 heights as builders focus on smaller floor plans.

Although the market needs a smaller scale, it is not clear that they will be built soon, according to Robert Frick, an economist at Naval Federal Credit Union Corporation. Housing construction has slowed down after the pandemic, and homes are usually built larger because buyers tend to earn higher incomes.

“We are still below the housing we should be based on population and family, and that’s a long-term problem,” Frick said.

As inventory dilemma persists, buyers turn to townhouses

Limited stockFrick said that especially for smaller entry-level homes is plaguing the housing market, especially when high mortgage rates increase borrowing costs.

Rose Quint, assistant vice president of survey research at the National Association of Home Builders, said the demand for smaller homes can be seen in the 17% of the single-family market, and now 17% of the single-family market.

“It’s a simple reason: townhouses are more affordable as materials, plots and labor prices continue to rise,” Quint said.