Special offer

Is There A Small Home In Your Future?

By
Real Estate Agent with RE/MAX Shoreline New Hampshire & Maine

Is there a small home in your future?

Portsmouth, NH Real Estate

It’s a definite possibility. Over a third of builders surveyed said they built smaller homes in 2023. More than 25% plan to build even smaller homes this year. Here’s why.

Here are the reasons why

The top two home-buying generations are searching for smaller homes.

  • Millennials are looking for starter homes
  • Baby Boomers are looking to downsize

Both groups for different reasons don’t require a home of more than 2,500 square feet. Many millennials are moving from either their parents’ homes or smaller apartments and do not need a large detached home as their first house . . . Similarly, baby boomers looking to move may be empty nesters wanting to downsize from their current homes

Smaller households are increasing with the majority being in the one to two-person range. Households with four or more people have been decreasing over the past several years.

Affordability has also been decreasing

Builders are reducing the sizes of their homes as one way to keep costs down and keep their homes affordable.

Opting for a smaller, more budget-friendly house means you don’t have to save as much for a down payment and upfront costs of owning a home. This approach simplifies and speeds up the homebuying process, letting you become a homeowner sooner. In fact, many renters are drawn to smaller homes because they are less expensive and can start building equity quickly.

After a brief increase during the post-COVID building boom, home size is trending lower and will likely continue to do so as housing affordability remains constrained.

The downsizing accelerated last year when the interest rate on a 30-year fixed-rate mortgage reached a two-decade high, just shy of 8 percent.

As a result, homebuilders are adapting to the lowest affordability on record by building smaller homes and offering more incentives/price cuts.

Buying a smaller home is still a good deal; here’s why:

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. . . . And if you get that size down, that automatically will make it a more affordable home. As home prices are projected to continue to rise; it becomes more imporant than over to get started by buying a home, even if it is a smaller home to start.

One last important fact to remember. A homeowner’s net worth is over 40 times that of a renter. The reason? Simple, owning a home is an automatic wealth builder. As you pay your mortgage down, your equity (that’s your profit in your home) increases. And historically home prices have consistently risen so when you get ready to sell your home will be worth more and you’ll take more to the bank or to apply towards your next home.

Questions? Ready to talk about buying a home? We’re here for you. Let’s start the conversation and get on the path towards making you a homeowner soon.

Ann Cummings & Jim Lee, REALTORS, 2004 & 2017 NH REALTOR of the year,Ann Cummings and Jim Lee, REALTORS, Accredited Buyer Representative (ABR), Certified Residential Specialist (CRS)

Posted by

Jim Lee , REALTOR®, Certified Residential Specialist (CRS)

http://JimLee.com  RE/MAX Shoreline

100 Market St., Suite #200, , Portsmouth, NH 03801 Phone: (603) 431-1111 x3801

Visit New Hampshire Maine Real Estate.com to search homes, get Seacoast area information, and find out how great living on the New Hampshire and southern Maine Seacoast really is.

 

Follow RealtorJimLee on Twitter

Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Jim, it's really a smaller home for a lot more money around here. New home prices are certainly not falling, no matter how small they might be making them. 

Apr 24, 2024 10:44 AM
Jim Lee, REALTOR, CRS, ABR

It's that "location, location, location" thing Patricia. We're listing a beautiful antique home about 20 miles away for $480,000. It would be 1.2 million across the street from us. 

 

Apr 24, 2024 03:00 PM
George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Jim Lee, REALTOR, CRS, ABR you are right.  Retirement is not to far away, and a smaller one level home will not be far behind it.

Apr 24, 2024 01:44 PM
Jim Lee, REALTOR, CRS, ABR
RE/MAX Shoreline - Portsmouth, NH
Buying or Selling? Ann & Jim are the local experts

Smaller and one level is sounding pretty good to us too. 

Apr 24, 2024 03:00 PM