Today’s first-time homebuyers face so many obstacles, including inflation, inventory shortages, and soaring interest rates, that the issue even made it to the State of the Union. “We know that housing costs are very important to you,” President Biden said. “Inflation continues to fall and mortgage rates will fall. But I’m not waiting.” Among the measures he has put forth to ease these burdens are housing shortages. It included a promise to build or renovate 2 million affordable housing units to fill the gap. According to the washington postwill look a little different than McMansions of the past, as developers see the wisdom in downsizing.
“Even a slightly smaller home could be thousands of dollars cheaper for both builders and buyers,” said Andy Winkler of the Bipartisan Policy Center. post. The average square footage of new homes in 2023 shrank by 4% to 2,179 square feet due to a shift to smaller builds to meet demand at a cost affordable to new home buyers. Builders are cutting costs by offering buyers fewer windows, doors and cabinets to build “smaller, taller” homes. post-Allows a 6% decline in house prices. Townhouses are also on the rise, with one in five new homes under construction last year, a record high.
Even smaller homes are becoming an option. new york times This is called “large compression.” They explore the micromarket of homes under 500 square feet on small lots that are being built on developed land. These tiny homes still make up a small portion of housing construction, less than 1% of new homes, but they are rapidly being scooped up.but post They point out that Americans are buying smaller bargains at a rapid rate, but it’s not necessarily out of preference. “Americans didn’t suddenly become obsessed with tiny houses,” Winkler said. “They can’t afford anything else.” (Millennial housing strategy? Living with his parents.)