Housing affordability is a major issue many people are facing right now, and it’s increasing demand for smaller, more affordable homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains: “as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower.” If you’ve been held back from purchasing by lack of inventory or high rates and would love a more affordable home, we have good news!
Smaller, more affordable homes are becoming available.
According to Ali Wolf, Chief Economist at Zonda, “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.”
We saw the beginning of this trend during the pandemic. When people were staying at home—working at home, exercising at home, attending school from home—they needed more space. Many people bought a larger house, selling their smaller house. Those who already had a larger house tended to keep it. This meant that homes listed during the pandemic were smaller than what was on the market pre-pandemic.
This graph shows what happened during the pandemic and how things are trending now:
This graph also shows the seasonal changes in size of listed homes. Larger homes tend to come on the market during the summer, as this is typically the most convenient time for families with children to move. Houses listed in the winter tend to be smaller.
It’s not just existing-home inventory that’s trending smaller. Homebuilders are also bringing smaller, more affordable homes to the market. Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, elaborates: “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.”
What this means for you as a buyer:
If you’re looking to downsize, know that smaller homes are becoming more popular and more will be available soon. Don’t give up on finding your perfect new home; keep your eyes on the market this winter. Since inventory is still low, you should be prepared to make an offer right away if you’re serious about a home. This also means you should be prepared to sell your current house quickly!
What this means for you as a seller:
If you’re looking to sell a smaller home, know that demand is out there. If your home is move-in ready, it will likely do well on the market.
If your home is dated or in need of repairs, it may not sell quickly on the market. Don’t worry, though—a home that is less than perfect is perfect for buyers like us! You can sell your house fast in any market by getting an as-is cash offer from MarketPro Homebuyers. With an as-is cash offer, you don’t sink time and money into repairs. You get a quick, easy sale and can then use that money for your next house or future plans.
Work with MarketPro:
We’ll give you a fast, as-is cash offer for your current home; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, Pennsylvania or Florida, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.
