As the housing industry celebrates New Homes Month in April, millennial buyers say they are willing to compromise when it comes to space. A (NAHB) analysis found that millennial buyers prefer more square footage than other generations, but most would choose a smaller feature-rich home for the same purchase price.
鈥淏uyers are willing to make compromises to find the best possible home for their families,鈥� said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C. 鈥淥ur nation鈥檚 builders are willing to meet buyers where they are and construct a high-quality home to meet their family鈥檚 needs.鈥�
Millennial buyers say they want a home with a median of 2,408 sq. ft., the most requested amount of interior space compared to other generations, according to NAHB. However, more than half (52%) of millennial home buyers say they would rather purchase a smaller house with higher-quality products and amenities than a bigger one with fewer amenities.
Data from the U.S. Census Bureau confirm that builders are constructing smaller homes. The median home size dropped from 2,200 sq. ft. in 2023 to 2,150 sq. ft. in 2024鈥攖he lowest in 15 years鈥攁fter holding strong at 2,300 sq. ft. from 2019-2022. To increase overall living space, builders are adding porches and patios to the exterior of homes.
Home builders are constructing smaller homes partly due to housing affordability concerns. Mortgage rates are expected to remain above 6% throughout 2025, coupled with elevated home prices, creating a significant affordability challenge for first-time buyers and those looking to upgrade.
Given the current housing affordability climate, builders are making some concessions to help families achieve homeownership. According to the latest NAHB/Wells Fargo Housing Market Index, nearly a third (29%) of builders cut home prices in March, up from 26% in February. The average price reduction was 5% in March, the same rate as the previous month. About 59% of builders used sales incentives in March, unchanged from February.
鈥淗omeownership is key to strengthening communities across the country and helps families increase their level of economic prosperity,鈥� said Hughes. 鈥淭he residential construction industry has solutions to help bring down the cost of housing and is willing to work with all levels of government to solve affordability challenges, so more families have a place to call their own.鈥�
In response to the ongoing housing attainability barriers families across the country face, NAHB members will discuss housing priorities and affordability solutions with their members of Congress during NAHB鈥檚 Legislative Conference, which will take place on June 11 in Washington, D.C.
