Get Ready for Smaller, More Affordable Homes

 
Have you encountered challenges in your quest to purchase a home due to the escalating mortgage rates and soaring home prices? If you have, here's some encouraging information: According to Ali Wolf, Chief Economist at Zonda:

 

"There's a positive development on the horizon – a surge in the availability of smaller, more budget-friendly homes is anticipated in the next 12 to 24 months."
 
In many respects, smaller homes are already making their presence felt. With the advent of the pandemic, the concept of home underwent a transformation. Homes became not just places to reside but also spaces for work, education, exercise, and more.
 
Those fortunate to have spacious homes opted to retain them, while others sought to sell their smaller residences in favor of larger ones. Consequently, during the pandemic, homes hitting the market tended to be smaller compared to pre-pandemic offerings, and this trend persists today (as illustrated in the accompanying graph).
 
 
Additionally, the graph underscores how the size of homes on the market varies seasonally, with larger homes often becoming available during the summer months when families with school-going children consider moving.
 
Taking into account these seasonal patterns and the impending arrival of fall, we can anticipate that smaller, more cost-effective homes will continue to appear on the market throughout the remainder of the year.
 
This development is especially promising considering the observations of Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), who notes that: 
 
"The demand for smaller homes has surged recently due to the increase in interest rates in 2022 and the resulting deterioration in housing affordability."
 
So, what does this mean for you? The seasonal trend of smaller homes entering the market in the latter part of the year, combined with builders currently introducing smaller, more affordable newly constructed homes, represents a positive outcome – particularly if you've been grappling with the affordability of homeownership. According to Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting:
 
"This increase in the availability of smaller homes may not completely resolve the affordability crisis, but it does create opportunities for individuals to access entry-level homes in desirable areas."
 
In conclusion
If the idea of owning a smaller, more budget-friendly home aligns with your aspirations, there's good news on the horizon – these homes are on their way. To stay informed about what's happening in your local housing market, let's connect and explore your options.
  

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