September 11, 2023
Have you been trying to buy a home, but higher mortgage rates and home prices are limiting your options? If so, here’s some good news – based on what Ali Wolf, Chief Economist at Zonda, has to say – 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 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):This graph also shows 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, 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.”
The seasonal trend of smaller homes coming to the market in the later months of the year, coupled with builders bringing 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 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.”
If a smaller, more affordable home sounds appealing to you, good news – they’re coming. To keep up with what’s available in our area, let’s connect.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Center Real Estate, DBA does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Center Real Estate, DBA will not be liable for any loss or damage caused by your reliance on the information or opinions contained here.
Stay up to date on the latest trends in real estate.
April 29, 2024
Thinking about selling your house? If you are, you might be weighing factors like today’s mortgage rates and your own changing needs to figure out your next move.
April 22, 2024
According to recent data from Fannie Mae, almost 1 in 4 people still think home prices are going to come down. If you’re one of the people worried about that, here’s w… Read more
April 15, 2024
Have you been saving up to buy a home this year? If so, you know there are a number of expenses involved – from your down payment to closing costs. But did you also kn… Read more
April 8, 2024
If you have student loans and want to buy a home, you might have questions about how your debt affects your plans. Do you have to wait until you’ve paid off those loan… Read more
April 1, 2024
Are you thinking about making a move? If so, now may be the perfect time to start the process. That’s because experts say the best week to list your house is just arou… Read more
March 26, 2024
Before making the decision to buy a home, it's important to plan for all the costs you’ll be responsible for. While you're busy saving for the down payment, don't forg… Read more
You’ve got questions and we can’t wait to answer them.