Get Ready for Smaller, More Affordable Homes

Have you been trying to [buy a home](https://www.simplifyingthemarket.com/2023/08/02/how-to-know-if-youre-ready-to-buy-a-home/?a=550432-7d0dd2250a392515b4ab3273bfa644ce), but higher [mortgage rates](https://www.simplifyingthemarket.com/2023/08/03/how-inflation-affects-mortgage-rates/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) and [home prices](https://www.simplifyingthemarket.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) are limiting your options? If so, here’s some good news – based on what Ali Wolf, Chief Economist at _Zonda_, has to [say](https://www.realtor.com/news/trends/first-time-buyers-rejoice-builders-are-finally-putting-up-more-affordably-priced-starter-homes/) – smaller, more affordable homes are on the way: > _“Buyers should expect that over the next 12 to 24 months_ **_there will be a notable increase in the number of entry-level homes available_**_.”_ In some ways, [smaller homes](https://www.simplifyingthemarket.com/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) are already here. When the pandemic hit, the meaning of home changed. People needed the space their home provided not only as a place to live, but as a place to work, go to school, exercise, and more. Those who had that space were more likely to keep it. And those that didn’t were in a position where they were trying to sell their smaller house to move up to a larger one. That meant the homes coming to the market during the pandemic were smaller than those on the market before the pandemic – and that trend continues today (_see graph below_):[](https://i0.wp.com/www.simplifyingthemarket.com/content/images/20230905/20230907-Home-Size-Smaller-than-Pre-Pandemic.png?ssl=1)This graph also [shows](https://www.realtor.com/research/data/) how the size of homes on the market changes seasonally. Larger homes tend to come on the market during the summer months when households with children who are out of school are looking to move. That seasonality means, based on historical trends and the fact that fall is now approaching, we can expect smaller, more affordable homes to come to the market throughout the rest of the year. That’s great news because, as Robert Dietz, Chief Economist at the _National Association of Home Builders_ (NAHB), [states](https://eyeonhousing.org/2023/08/single-family-home-size-moves-lower-to-more-than-a-decade-low/), the need for these types of homes has gone up recently: > _“. . . as interest rates increased in 2022, and housing affordability worsened,_ **_the demand for home size has trended lower_**_.”_ #### **What Does This Mean for You?** The seasonal trend of smaller homes coming to the market in the later months of the year, coupled with builders [bringing](https://www.simplifyingthemarket.com/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) smaller, more affordable newly built homes to the market right now, is good news – especially if you’re finding it difficult to afford a home. Mikaela Arroyo, Director of the _New Home Trends Institute_ at _John Burns Real Estate Consulting_, [says](https://www.marketwatch.com/story/the-shrinking-american-home-as-demand-rises-builders-go-smaller-ed2a327c) this about a potential increase in the availability of smaller homes: > _“It’s not solving the affordability crisis, but_ **_it is creating opportunities for people to be able to afford an entry-level home_** _in an area.”_ ### Bottom Line  If a smaller, more affordable home sounds appealing to you, good news – they’re coming. To keep up with what’s available in your area, [connect](https://www.simplifyingthemarket.com/2023/08/23/why-you-need-a-true-expert-in-todays-housing-market/) with a local real estate agent.