Shrinkflation has reached the housing market, with new single-family homes shrinking 11% over the past decade while price per square foot has risen 74%. Builders are reducing hallways and bedrooms and designing compact floor plans to lower sticker prices, but the smaller footprints can force homeowners to outgrow properties sooner. Buyers now may need to hold properties up to ten years to break even on purchase costs, up from a traditional five-year rule. The downsizing trend hits first-time buyers and growing families hardest and is especially pronounced in regions where homes shrank most and where prices climbed sharply.
The article discusses how shrinkflation, the trend of reducing the size of products while maintaining or increasing their prices, is now affecting the housing market. New single-family homes have decreased in size by 11% over the past decade, while their price per square foot has surged by 74%. Builders are cutting hallways, bedrooms, and designing compact floor plans to make homes more affordable.
Builders are reducing the size of new single-family homes by 11% while increasing the price per square foot by 74%. Homebuyers may need to hold on to their homes for as long as 10 years before breaking even, compared to the previous rule of five years. The trend of shrinkflation is most challenging for first-time buyers and growing families, forcing them to stay in homes that no longer meet their needs.
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