High borrowing costs and affordability challenges hinder homeownership for many Americans. The Joint Center for Housing Studies reported a decline in the median size of new single-family homes, now at 2,150 square feet. Builders are adapting by constructing smaller homes to cater to the demand for affordable housing. In response to cost increases, there is a shift towards denser housing options, like townhomes and build-to-rent communities, especially in areas with higher living costs. Buyers increasingly seek creative solutions to afford home purchases amid these challenges.
The median size of a new single-family home declined for the third straight year in 2024, down to 2,150 square feet. That's down from nearly 2,500 square feet in 2013.
Homebuilders are able to make adjustments to meet demand where it is, and what it's showing is that there's demand for lower-cost units.
Builders are prioritizing density by shifting toward townhomes and build-to-rent communities to meet the demand for entry-level housing, especially in the Northeast and Western states.
Home shoppers are finding creative ways to achieve homeownership given that prices have risen so high over the past three, four, five years, and interest rates remain relatively high.
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