As the housing industry gears up to celebrate New Homes Month in April, the focus is on the shifting preferences of homebuyers amidst ongoing affordability challenges.
According to a report by the National Association of Home Builders (NAHB), there has been a noticeable trend towards smaller homes in response to the needs of prospective buyers. NAHB Chairman Carl Harris emphasized that "homeownership remains a goal for families who are eager to put down roots and have a place to call their own."
The report revealed that a significant percentage of builders have been adapting to these changing preferences, with more than a third having built smaller homes in 2023, and over a quarter planning to go even smaller this year. The median size of new homes constructed in 2023 saw a decrease, marking the smallest in 13 years.
Data from the U.S. Census Bureau further supported this trend, indicating a consistent reduction in the size of new homes over the past decade. The median size of new homes built in 2023 dropped to 2,179 square feet, the lowest since 2010.
Despite the shift towards smaller homes, affordability remains a significant hurdle for many aspiring homeowners. NAHB noted that more than one-third of builders reduced home prices in 2023, with the median price of new homes also experiencing a decrease. Harris stressed that "boosting the nation’s housing supply is key to improving housing affordability."
However, builders are facing challenges on the supply side, including the scarcity of buildable lots, a shortage of skilled labor, and restrictive building codes. These challenges contribute to the increased costs of construction, even as efforts are made to offer more affordable housing solutions.
In response to these pressing issues, NAHB members from across the country are set to engage with their representatives during the upcoming Legislative Conference in Washington, D.C. The goal is to address housing priorities and explore potential affordability solutions to make homeownership more accessible to Americans.
