A decade ago if you wanted a new house, the question was do you want big, or bigger?
But the biggest trend in new homes these days is smaller homes, on smaller lots.
It's in response to the housing affordability crisis, and fewer large lots available in many high-demand communities.
High-end living in a smaller package
Ben Fry is a home builder with Fry Homes.
His new community called Orchard Trail is a prime example of building beautiful homes on much smaller lots.
"Lots are becoming harder and harder for builders and developers to find," he said.
We found his workers putting the finishing touches on a new house that looks much different from typical subdivision homes.
"In the bedroom," he said, "you are finding enough space for your bed and dressers. You're not seeing the sitting rooms or huge garden tubs anymore."
On the main level, the kitchen seamlessly goes into the family room, home office area and first-floor master suite.
There is no longer a formal living room.
"People are getting smarter with the square footage, putting more footage in the livable space," Fry said.
Home size peaked in 2021
The National Association of Home Builders said home size shot up in 2021 when the pandemic sparked demand for more space, with so many couples working from home.
Since then, however, floor plans started to shrink.
Data from the US Census Bureau shows square footage of new housing units declined from about 2,500 square feet in 2021, to 2,400 in 2022 and 2023.
In the first quarter of 2024, the average new home is closer to 2,300 square feet.
There is another issue at play: soaring building and labor costs to put up a new home.
Nerdwallet’s Holden Lewis said structures such as townhomes are cheaper to build and therefore, cheaper to buy.
"Homebuilders are responding to affordability issues," he said.
Lewis said buyers are also giving up perks such as garage space.
"People still want bigger houses," he said. "But a lot of times when you just want to buy your first house, you wanna buy your starter home, you know, you're kind of forced to start small.”
If you're in the process of building but need to trim your budget, builder Ben Fry said some buyers are leaving some spaces unfinished.
"Finishing a little of the basement but not the whole thing helps somewhat," he said.
Home buyer Carolyn Marsh, downsizing from a large family home, is sold on the idea of small.
"In the smaller house, I feel freedom," she said. "Freedom from taking care of such a large place and yard."
And that way you don’t waste your money.
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