2024 Housing Trend: The Shrinking House
As the year progresses, more real estate market trends are revealed!
Ever heard of “shrinkflation” in the grocery store? That pack of cheese sticks that used to contain 12 mozzarella sticks now has 10 but costs the same. It’s a method to offer a product but make up for the increased cost of production and distribution. Well, it seems this trend isn’t just applicable to your grocery haul, but it also applies to home sizes.
That’s right- the typical new single-family home built in 2023 is a few hundred square feet smaller than the 2018 average new build. American homes are shrinking to make up for inflation and increased interest rates. Why? It’s a countermeasure to keep homes affordable and accessible to home buyers.
If you’re looking for a new home in 2024, you can expect to pay the same for less square footage. Real estate in America is experiencing a historical price hike and affordability crisis. This has pushed the average size of new homes down to make up for the higher cost of borrowing.
While bigger was better when prices and interest rates were at rock bottom, the housing market is now trending “small but mighty”, with home prices tempered to stay as low as they possibly can to even out costs.
Housing Market Trend: Less Square Footage
According to Zonda, the average new single-family home is between 300-500 square feet smaller than the average home built in 2018. All numbers considered, the overall decrease is by 10%.
As the National Association of Home Builders (NAHB) urges Congress to see affordability as a top concern, it’s no surprise that smaller homes are trending. This is a sharp turn from the pandemic trend of upgrading home size in response to remote work and school.
Every US Home market has its trend, and things are much different compared to last year when mortgage rates were half of what they are today. Builders are adapting to these financial trends by passing on the bigger houses and decreasing the average living spaces in their new models.
Long story short: It may be a while until we see an influx of “mcmansion” neighborhoods. But look at the bright side: utility bills are lower in small houses compared to larger houses, and they are keeping median prices as low as possible.
Not Every City Has the Same Trend
While this mass new construction home shrinkage is a national average, it doesn’t speak for all U.S. cities. For example, home sizes increased in Sacramento, California, where larger homes are still trending.
When looking for a new construction home, always ask your realtor about local market trends. This helps you find the right price and median home size to meet your needs. After all, you want your new home to be perfect, and we can help you find the house of your dreams!
Find a New Construction Home with Your Ideal House Size
Just because average home sizes are smaller, it doesn’t mean that there aren’t larger floor plans to choose from. If you want to check out bigger homes, just ask our real estate experts to look for builders who can make it happen. We’re ready to help anytime!