In response to evolving homebuyer preferences, SRP Lending encourages home builders to construct smaller, high-quality homes. Recognizing a significant shift in the housing market, SRP Lending sees an opportunity for home builders to create residences that align with the desires of first-time buyers and the 55+ demographic, who increasingly favor 1,800 square feet or smaller homes.
The National Association of Home Builders recently released its 2024 edition of “What Home Buyers Really Want,” showcasing a significant shift in homebuyers’ preferences toward smaller living spaces over the past two decades. In 2003, the desired size was approximately 2,260 square feet of finished space; by 2023, this preference was reduced to 2,067 square feet. According to NAHB’s Eye on Housing, home size is trending lower after a brief increase during the post-COVID building boom — due to a desire for more space to work from home and home school. It will likely continue to do so as housing affordability remains constrained.
Data from the U.S. Census Bureau shows the average size of new homes has declined for nearly a decade. This continued downward trend highlights a clear market response to evolving consumer preferences, reinforcing the importance for builders to adapt and focus on constructing smaller, quality homes that align with current demands.
“The message from the market is clear: homebuyers are looking for affordability without sacrificing quality. This opens a new avenue for builders to explore smaller homes with high-quality finishes and smart, efficient designs,” said Geoffrey Deckelbaum, Principal at SRP Lending. “At SRP Lending, we’re ready to support builders looking to meet this demand and shape the future of residential construction.”
The call for smaller homes comes at a time when the housing market is adapting to significant changes in buyer behavior. Younger buyers are entering the market, and those 55 and older are looking for homes that fit their lifestyle without the maintenance and financial strain of larger properties. They seek spaces that are easy to live in, energy-efficient, and reflect their values, including sustainability and minimalism.
Deckelbaum further explains, “These buyers don’t want a lesser house, just a smaller one. They value quality over quantity and are willing to invest in homes that offer premium living experiences in a more compact footprint. It’s an exciting time for builders to innovate and for lenders to back these forward-thinking projects.”
SRP Lending is committed to facilitating this shift towards smaller, quality homes through flexible lending solutions tailored to home builders’ needs. By supporting projects that align with market demands, SRP Lending contributes to a housing market that values quality, sustainability, and affordability.
Builders interested in exploring financing options for smaller home projects are encouraged to contact SRP Lending to learn how to tap into this growing market segment. For more information about SRP Lending’s services, please visit www.srplending.com.