Unlike in the past, the homes in the U.S are now changing. The newly built homes are shrinking. According to a previous report by wsj.com, "The median size of U.S. homes built in the second quarter declined from the record set in the previous quarter, suggesting builders are starting to shift toward producing more entry-level homes." What led to the change of home design? It could be the influx of first time buyers that is leading the developers to size down in their construction methods.
The shrinking size of new homes in the U.S is not a big problem since it helps in boosting the real estate industry as well. The National Association of Home Builders estimates that first-time buyers, who tend to purchase entry-level homes, will account for 18% of new-home sales this year as stated in a report by wsj.com. The data given by wsj.com further showed that "It is up from 16 percent last year, but still well short of their share of 25 percent to 27 percent from 2001 to 2005." In regards to quarterly median sizes for new homes, it alternated from 2,051 to 2,263 square feet. According to elledecor.com, "Those numbers appear to be making a downward spiral with simplified living and tiny homes growing in their appeal."
One good thing about small or shrinking homes are that it is the first option that entry-buyers would want to buy. In recent years, many younger people who otherwise would buy a home have opted to rent. It is due to stringent mortgage-qualification standards, relatively sluggish job and wage growth, mounting student debt and preferences for living near city centers as stated in a report by wsj.com . These reasons alone magnify the option for entry-buyers to choose small homes that are within their financial budget.
Home buying is never easy for first time buyers, but despite the economic struggles, home industry is steadily adjusting to the ups and downs of the real estate industry.
