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The Small Housing Trend with a Big Impact


“A man’s home is his castle” is a proverbial expression that dates back to the 1600s, but the latest trends show that today’s Homeowners could forgo the castle and be satisfied with just the keep. According to the Harvard Joint Center for Housing Studies, new completions for homes under 1,800 square feet rose 20 percent last year. This was the first significant growth for this segment since 2004 and all signs indicate that this trend is not going away any time soon.

Huge Tracts of Land

Huge Tracts of Land

One of the strongest indicators of Homebuyers’ interest in compact homes is the prominence of smaller homesites or lots. Metrostudy, a national housing research firm that tracks residential construction and platting activity, noted the recent uptick in homesites that are 50-foot and under. There are benefits all around for a more manageable size – builders are able to maximize the land that is under development and Homebuyers have the advantage of limited upkeep, internally and externally.

In the Driver’s Seat

With such a strong shift in the housing industry, many are asking, “Who is driving this trend?” The answer may surprise you. Millennials may have a reputation for wanting bigger and better things, but that doesn’t necessarily correlate to their housing preferences. The younger generation is showing restraint by purchasing moderately-priced homes with a substantial focus on location and amenities.

Joining their kids (and grandkids!) in the smaller housing market are baby boomers. A significant portion of these Homebuyers have an empty nest and desire to connect with others, resulting in their desire for active adult communities that feature low-maintenance living and increased amenities. Per Trulia, millennials and baby boomers comprise more than two-thirds of the home buying market so there is strength in their numbers… and home buying preferences.

In the Driver’s Seat

Goldilocks Effect

Goldilocks Effect

It appears that in the future, decreased home sizes are here to stay. The oversized, 3,000-square foot homes and trendy, 400-square foot dwellings will still be available, but data suggests that single-family homes will remain minimized and feel just right. Analysts point to the post-recession economy where Homebuyers are more cautious with their spending as another reason for the continued trend.

Millennials and baby boomers have indicated their desire for low-maintenance, manageable homesites with decreased square footage homes and builders across the nation have responded. For the first time in more than a decade, there is a growing trend of shrinking homes.


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