New home builders are constantly challenged to provide homes that check off all of the boxes on buyers' wishlists. Often, this means delivering the latest in technology, trends and floorplans. But what buyers are looking for fluctuates over time.
Looking back, we can see that new home builders saw the demand for larger homes rise from 2009 to 2015. Home buyers were turning to new construction to upgrade from their existing homes. This demand shifted and home size declined between 2016 and 2020 as more starter homes were constructed. Then, in 2020, Covid hit and home buyers' demands once again shifted as there was a need for more residential space. People were spending more time in their homes and school and work became remote. Home size correspondingly increased in 2021 as interest rates reached historic lows and affordability was at an all time high.
In today's housing market, home size is once again trending lower and will likely do so as housing affordability remains constrained. There are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. Buyers have become increasingly willing to make concessions. Builders are responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points. In return, this is creating opportunities for people to purchase an entry-level home in a given area right now while affordability remains a challenge.
If you’re having a hard time finding a home you like in your budget, contact Arrive Real Estate Group. At Arrive, we know all about the latest inventory in our area, including future neighborhoods, those still under construction or recently built. You will have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the home buying process.