Embrace the Upcoming Wave of Compact, Budget-Friendly Homes

Lisa Mailhot  |  September 7, 2023


Embrace the Upcoming Wave of Compact, Budget-Friendly Homes


Are you currently in the market for a new home, but finding your options limited due to rising mortgage rates and soaring property prices? There's a silver lining on the horizon. According to Ali Wolf, Chief Economist at Zonda, a wave of smaller, more affordable homes is set to hit the market in the near future: 

“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.”

In fact, smaller homes have already begun to make their mark. When the pandemic struck, the concept of home took on a new significance. It became more than just a living space; it transformed into a workspace, a school, a gym, and more. Those fortunate enough to have spacious homes were keen to hold onto them, while others found themselves trying to sell their smaller residences in order to upgrade. As a result, homes listed during the pandemic tended to be smaller than those listed before the outbreak, a trend that continues to this day (as illustrated in the chart below):


This chart also illustrates the seasonal fluctuation in home sizes on the market. Larger homes tend to become available during the summer months when families with school-age children consider moving.

Considering this seasonal pattern, along with the approach of autumn, we can expect smaller, more affordable homes to become available throughout the remainder of the year.

This is particularly welcome news, as Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), points out that the demand for smaller homes has risen recently:

“. . . as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower.”

What Does This Mean for You?

The combination of the seasonal trend of smaller homes entering the market in the latter part of the year and builders introducing more compact, affordable new homes right now is excellent news, especially if homeownership has been elusive due to affordability concerns. Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, comments on the potential increase in the availability of smaller homes:

“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.”

Bottom Line

If the idea of owning a smaller, more budget-friendly home appeals to you, the good news is that such options are on the horizon. To stay informed about the opportunities in our area, let's get in touch.

Recent Blog Posts

Stay up to date on the latest real estate trends.


Unlocking Cost-Free Real Estate Marketing Strategies for Maximum Impact

Lisa Mailhot  |  May 17, 2024

Explore five innovative and cost-free real estate marketing strategies that leverage creativity and strategic thinking to enhance your brand's visibility. From network… Read more


The Rise of Tiny Homes as a Game-Changer in Modern Housing

Lisa Mailhot  |  May 16, 2024

Tiny homes are gaining popularity as affordable and eco-friendly housing options, but they come with pros and cons. Explore the tiny house movement and whether it's th… Read more


Practical Steps to Achieve Financial Prosperity

Lisa Mailhot  |  May 14, 2024

Discover effective strategies to build wealth and achieve financial freedom in our latest blog. Learn about setting financial goals, managing debt, and the importance … Read more


Inland Empire Warehouse Market Faces Oversupply, Rents Under Pressure

Lisa Mailhot  |  May 14, 2024

Explore the current challenges and opportunities in the Inland Empire warehouse market, where an oversupply bubble causing downward pressure on rents. Benefit from ind… Read more


Q1 2024 Home Price Surge: Analyzing Metro Market Trends 

Lisa Mailhot  |  May 10, 2024

Discover the latest trends in the U.S. housing market with over 90% of metro areas posting price gains in Q1 2024. Learn which regions are seeing the biggest increases… Read more


The Power of Diversity: Enhancing Real Estate Growth and Success

Lisa Mailhot  |  May 10, 2024

Discover how diversity can drive innovation, strengthen client relationships, boost team morale, and improve brand reputation in the real estate industry. Embrace the … Read more


Unraveling the Top 10 Deal Breakers in Commercial Real Estate

Lisa Mailhot  |  May 9, 2024

Navigating the complex world of commercial real estate can be a minefield, with many possible challenges that can disrupt even the most promising deals. From financing… Read more


How MLSs Are Taking the Reins in Enforcing NAR Settlement Changes

Lisa Mailhot  |  May 8, 2024

Discover the pivotal role of Multiple Listing Services (MLSs) in enforcing the latest commission rules set by the National Association of Realtors (NAR). Learn how the… Read more


Homeownership Dreams Fading for Renters in Orange County

Lisa Mailhot  |  May 7, 2024

The latest Federal Reserve Bank of New York survey has revealed a stark reality for renters in Orange County and nationwide – the prospect of owning a home is becoming… Read more

Let’s Talk

You’ve got questions and we can’t wait to answer them.