“Buyers should expect that over the next 12 to 24 months there will be a notable increase in the number of entry-level homes available.
In some ways, smaller homes are already here. When the pandemic hit, the meaning of home changed. People needed the space their home provided not only as a place to live, but as a place to work, go to school, exercise, and more. Those who had that space were more likely to keep it. And those that didn’t were in a position where they were trying to sell their smaller house to move up to a larger one. That meant the homes coming to the market during the pandemic were smaller than those on the market before the pandemic – and that trend continues today (see graph below):
“. . . as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower.”
What Does This Mean for You?
The seasonal trend of smaller homes coming to the market in the later months of the year, coupled with builders bringing smaller, more affordable newly built homes to the market right now, is good news – especially if you’re finding it difficult to afford a home. Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says this about a potential increase in the availability of smaller homes:
“It’s not solving the affordability crisis, but it is creating opportunities for people to be able to afford an entry-level home in an area.”
