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The Latest Builder Trend: Smaller, More Affordable Homes

The CL Team
The CL Team
May 19, 2025

Buying a home can feel challenging these days, but there’s some good news for potential buyers. Builders are shifting their focus to constructing smaller, more affordable homes, and they’re also offering special incentives to make homeownership more attainable. These changes can make it easier to find a home that fits your budget.

Why Builders Are Focusing on Smaller Homes

A few years ago, during the pandemic, many people wanted larger homes. Buyers needed space for home offices, gyms, and extra rooms for kids learning online. Builders responded by creating bigger homes to meet those needs.

Today, the market looks different. Affordability is a major concern for buyers, so builders are now creating smaller homes to match what people can afford. In fact, the National Association of Home Builders (NAHB) says that homebuyers are looking for homes around 2,070 square feet, compared to 2,260 square feet just 20 years ago.

Why the change? Builders know that smaller homes usually come with smaller price tags. As a result, they’re building more homes with less square footage to meet the demand for affordable options. Orphe Divounguy, a Senior Economist at Zillow, explains:

“Buyers are looking for lower-cost options, and builders are adjusting the type and size of homes they offer to match that need.”
The CL Team Newly Built Homes Are Getting Smaller Chart

How Buying a New, Smaller Home Could Benefit You

If you’re struggling to find a home within your budget, looking at newly built homes might be a great option. Many builders are offering incentives to make new homes even more affordable. For example, some are offering price reductions or mortgage rate buy-downs, which can lower your monthly payments.

Recent data from Zonda shows that more than half of builders are providing these types of incentives. John Burns, CEO of John Burns Research & Consulting, says:

“The monthly payment is what matters most, and builders are responding by creating smaller, more efficient homes.”

Another benefit of buying a newly built home is that everything is brand new, so you’ll have fewer maintenance needs. Plus, new homes often come with modern features and energy-efficient technology, which can save you money over time.

Bottom Line

Builders are focusing on creating smaller, more affordable homes, which could give you more options when it comes to finding a home that fits your budget. If you’re ready to start your home search, let’s connect and see what’s available in your area.

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Builders are focusing on smaller, affordable homes with incentives like price cuts and rate buy-downs. These new homes offer modern features, energy efficiency, and lower maintenance costs.
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