Smaller Homes Are Back in Style

Downsize Me

Americans on the hunt for their dream homes fueled decades-long growth in the size of new houses. But this trend peaked in 2015, and now, new homes are getting smaller.

The median square footage of a new single-family home in 2015 was nearly 2,500, according to Census Bureau data. But as of last year, it had shrunk to just 2,233 square feet.

Housing Unaffordability

The home affordability crisis has gripped prospective first-time homebuyers. Low inventory of for-sale homes, slow building of new homes, as well as high material and labor costs are keeping home values in America high. And while that’s great for homeowners, it’s a challenge for prospective buyers.

From 2020 to 2024, the median price of a new home surged from less than $330,000 to roughly $427,000, a near-six figure increase.

With many potential homeowners priced out of their dream homes, some have considered buying smaller homes and giving up certain things like spacious bathrooms. Homebuilders are following this trend and started building homes with fewer bells and whistles to attract first-time homebuyers, per a CNN report.

Sparking Innovation

As some Americans are worrying they will never be able to buy a home, the growing number of smaller, more affordable homes could help change that.

Some U.S. cities, like Houston, are actively using their zoning rules to allow for smaller homes, doing their part in combating the affordability crisis.

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