Building Smaller Homes

Homes are getting smaller.  In general, homebuilders adjust to market demands.  Right now, the consumer is looking for a smaller home.  During the pandemic, buyers were looking for bigger homes so they could spread out a bit, especially those working from home.  In the US, the average size of a new construction home increased from around 2,450 square feet during the second quarter of 2020 to a peak of over 2,550 square feet at the end of 2021.  But as interest rates rise and prices become more expensive, buyers are looking to spend less so they’re willing to accept smaller homes.  By the end of 2023, the average size of a new construction home was around 2,375 square feet which was smaller than the start of covid.  About 25% of builders expect to construct even smaller homes in 2024.

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