After years of saving, Jordyn Carias and her partner achieved a major milestone last month when they purchased their first home. However, to stay within their budget, they had to make a tough choice — go smaller. “We had a lot of things we wanted in our first home, but after looking at the price range, we had to reassess,” said Carias, a graphic designer from Muscatine, Iowa.
America has long been known for its preference for “bigger”—from oversized cars to large portions of food, and, for much of recent history, sprawling homes. But now, that trend is changing. As home prices continue to rise and affordability becomes a challenge for many, buyers like Carias are choosing to downsize, finding smaller homes that better fit their budgets.
A Shift from Bigger to Smaller Homes
For the last half-century, single-family homes in the U.S. kept getting larger. In 1973, the median size of a new single-family home was 1,525 square feet, according to U.S. Census data. By 2015, that number had skyrocketed to 2,467 square feet. But recently, as housing prices have soared and McMansions have fallen out of favor, homebuilders have reversed course. By 2023, the median size of newly built single-family homes dropped to 2,233 square feet, a 9% decrease from the 2015 peak. Features like formal dining rooms and “bonus” rooms are disappearing from many new homes.
Carias and her partner settled on a home that is just 920 square feet. To maximize their space, they converted the basement into their primary bedroom. This downsizing reflects a broader trend in the housing market, driven by both changing buyer preferences and economic necessity. “The broader trend in larger homes had been driven by what consumers wanted and demanded,” said Alan Ratner, a homebuilder analyst at Zelman & Associates. “More recently, we’ve started to see that flip almost out of necessity, because of how challenging affordability is right now.”
From Levittowns to McMansions, and Back Again
Carias’ home, built nearly a century ago, is part of a shrinking group of smaller homes under 1,000 square feet. Such homes were once common in U.S. suburbs, especially during the post-World War II era when “Levittown” developments emerged as the symbol of American suburban life. These communities, starting in the late 1940s, featured compact houses — often 750 to 800 square feet — and maximized the use of land by fitting multiple homes on one acre.
“As many Americans became wealthier over the ’40s, ’50s, and ’60s, they wanted higher living standards and the larger homes that came with them,” said Jacob Anbinder, a historian at Cornell University. Over the years, homeowners expanded or demolished many of the original Levittown homes to build larger properties. This upward trend in home sizes continued until recent years, when the focus shifted back toward smaller, more affordable homes.
A Response to Affordability Challenges
With rising home prices, more homebuilders are responding to affordability challenges by constructing smaller homes. According to a 2023 survey by the National Association of Homebuilders (NAHB), 17% of builders said they built homes on smaller lots to support sales, and 14% said they built more townhouses. Even large builders like D.R. Horton, America’s largest homebuilder, are reducing the size of their homes. “We reduced the size of our homes by about 2% to address affordability for homebuyers,” said Michael Murray, D.R. Horton’s chief operating officer, during a July earnings call.
There are signs that these efforts are helping buyers: in June 2024, the median price of new homes was $417,300, compared to the median sales price of existing homes at $426,900.
Smaller Homes, Fewer Amenities
In many cases, the smaller homes being built today come with fewer amenities. Real estate agents like Heather Eisenmann, who specializes in new construction in Clarksville, Tennessee, have noticed the changes. “Many of the homes I show now have smaller bedrooms and living rooms, and we’re seeing more kitchen islands with bar seating instead of formal dining rooms,” said Eisenmann. Additionally, homebuilders are cutting back on features like freestanding tubs, expensive appliances, and extras like fences or window treatments to keep prices down.
But while this may make new homes more affordable, Eisenmann warns that it could drive some first-time buyers toward existing homes instead. “New construction is appealing to first-time buyers because it requires little to no maintenance,” she said. “But when they realize new homes don’t come with all the appliances, they often turn to existing homes.”
Embracing Smaller Living
Despite the smaller size, Carias and her partner are happy with their new home and have no plans to move anytime soon. After relocating from the more expensive Sacramento area to Carias’ hometown of Muscatine, they were able to find a home within their price range. “Our biggest goal was getting to carve out a tiny little slice of something that is ours and not throw away our money on renting anymore,” she said. “I am so excited to paint and do whatever I want.”
As housing prices remain high and affordability continues to challenge many prospective buyers, the trend toward smaller homes is likely to persist, offering a practical solution for those eager to own their own homes.
