America’s housing needs are changing, but are communities allowing builders to construct the types of homes buyers actually need? New research from John Burns Research & Consulting (JBREC) reveals a growing disconnect between household demographics and the nation’s housing supply. The findings point to an increasing need for smaller, more affordable homes, particularly for young adults, first-time buyers and older Americans.
According to an October 2026 report titled The US Needs More Small Homes, the country has approximately 4.3 million fewer households than it would if Americans were living independently at the same rates as in 2010. The research suggests that housing affordability and availability are contributing to delayed household formation.
For Georgia homebuilders, developers and policymakers, the findings reinforce an important message: Solving the housing affordability crisis requires more than building additional homes. It requires allowing the construction of homes that reflect how Americans live today.
American Households Are Getting Smaller
One of the most significant findings from JBREC is that the average American household continues to shrink, even as more adults share housing.
In 2010, the average household included 2.54 people. By 2025, that number had declined to 2.42 people.
Several demographic trends are driving this shift:
- Fewer children: The number of children per 100 households declined from 63 in 2010 to 51 in 2025.
- More seniors living alone: America’s aging population is creating demand for smaller homes that are easier to maintain.
- More adults sharing housing: Young adults are living with parents longer, while other adults are sharing homes rather than forming independent households.
- Changing family structures: Smaller families and households without children are influencing demand for different housing types.
JBREC estimates that the United States currently has approximately 135 million households compared to the 139.3 million that would exist if household formation patterns had remained consistent with 2010.
The gap affects every age group, although younger adults experience the greatest impact relative to their population. Among adults ages 15 to 24, household formation is approximately 9% below what earlier living patterns would suggest.
These findings indicate significant potential demand for housing if more Americans could find homes that fit their needs and budgets.
Why Smaller Homes Matter for Housing Affordability
For decades, much of the new-home market has emphasized larger houses with additional bedrooms, expansive living spaces and increasingly elaborate features. While demand for larger homes remains, changing demographics suggest the need for a broader range of housing choices.
Smaller detached homes, townhomes, cottages and thoughtfully designed attached housing can provide attractive alternatives to traditional single-family homes.
Smaller homes may offer several advantages, including lower overall purchase prices, reduced utility expenses, less maintenance and more efficient use of available land.
JBREC highlights successful examples of smaller-home communities, including detached homes ranging from 1,589 to 1,895 square feet in Raleigh, North Carolina, and townhomes ranging from 1,137 to 1,412 square feet in Jacksonville, Florida.
These communities demonstrate that smaller homes can offer desirable floor plans and modern amenities without requiring the square footage associated with larger traditional homes.
However, smaller does not automatically mean affordable. Land prices, infrastructure requirements, construction costs and local development regulations all influence the final price buyers pay.
Georgia’s Zoning Regulations Can Limit Smaller Housing Options
The research also highlights an issue that the Georgia Residential Land Development Council (GRLDC) has been addressing: Local government policies can make it difficult or financially impractical to build smaller, more attainable homes.
Across Georgia, zoning ordinances and development requirements may include minimum home sizes, large minimum lot sizes, restrictions on townhomes and other attached housing, costly infrastructure standards and lengthy approval processes.
These requirements can limit the types of housing available in a community, even when consumer demand supports smaller homes.
For example, requiring larger lots increases the amount of land needed for each home. When land and development costs are spread across fewer homes, the resulting prices can move beyond the reach of first-time buyers and moderate-income households.
Likewise, restrictions on cottages, townhomes and smaller detached homes can eliminate options for young professionals, empty nesters and seniors seeking to downsize.
GRLDC advocates for greater accountability, transparency and predictability in Georgia’s land development and permitting processes. Its work emphasizes that housing affordability begins long before construction starts.
The council has supported reforms intended to reduce unnecessary delays, establish clearer development review timelines and create a more predictable regulatory environment for builders and developers.
These efforts complement the broader need for zoning policies that allow communities to accommodate a wider range of housing types.
What Does This Mean for Metro Atlanta?
Metro Atlanta continues to face housing affordability challenges, particularly among first-time buyers and households seeking homes at attainable price points.
The JBREC findings suggest that expanding housing choices could help address some of these challenges.
Smaller detached homes on appropriately sized lots could provide an alternative to larger suburban houses. Townhomes and cottage-style communities could create opportunities for buyers who want homeownership without the expense or maintenance associated with a larger property.
For older homeowners, smaller single-level homes could provide opportunities to downsize while remaining in familiar communities.
Build-to-rent cottages and townhomes could also serve households that want the privacy and lifestyle of a single-family home but are not ready or able to purchase.
Importantly, these housing types can serve different stages of life rather than being designed exclusively for one demographic.
Building Homes That Match Today’s Households
The challenge for Georgia is not simply determining whether smaller homes are desirable. It is creating an environment where builders can deliver them at prices buyers can afford.
That means examining how local zoning, lot requirements, development fees and permitting processes affect the feasibility of new housing.
It also means recognizing that communities benefit from offering a variety of housing choices. Young adults establishing independence, growing families, empty nesters and retirees do not all need the same type or size of home.
The latest JBREC research reinforces the importance of aligning housing policy with demographic realities.
America’s households are getting smaller, and housing choices need to reflect that change.
For Georgia, expanding access to smaller homes represents an opportunity to improve affordability, support homeownership and create communities that better serve residents at every stage of life.
As GRLDC continues advocating for land development reform, the national research provides additional evidence that housing affordability starts well before a home is built. Allowing the market to respond to changing consumer needs is an important part of making homeownership attainable for more Georgians.
Source: John Burns Research & Consulting, “The US Needs More Small Homes,” October 20, 2026.
