Why Newly Built Homes Are Getting Smaller (And Why That’s Good News for Buyers)

If you’ve been following the real estate market, you might have noticed a surprising trend: newly built homes are shrinking in size. This shift reflects a change in buyer preferences and builders’ strategies, and it could mean good news for those looking to purchase a home in today’s market. Let’s break down what’s happening and why it matters for buyers like you.

Newly Built Homes Are Smaller Than They Used to Be

In 2022, the median size of a newly built home in the U.S. was 2,128 square feet. Fast forward to 2024, and that number has dropped to 1,965 square feet. Why are new homes getting smaller?

One major reason is affordability. With higher mortgage rates and tighter budgets, many buyers are looking for smaller homes that fit within their financial comfort zone. Builders are responding to this demand by constructing homes that are more budget-friendly while still meeting modern needs. This shift allows more buyers to enter the market and achieve their dream of homeownership.

New Homes Often Cost Less Than Resale Homes

Another surprising fact about newly built homes is that they often cost less than preexisting homes in many parts of the country. According to a 2023 study by StorageCafe, buying new construction can be a money-saver in 18 states. In California, for example, the average buyer saves around $200,000 when purchasing a newly built home instead of a comparable preexisting one. Buyers in Colorado, Utah, and areas near Washington, DC, can save about half that amount. And in Hawaii, the difference is staggering—preexisting homes can cost nearly double what a new construction home does.

Why Are New Homes Often Cheaper?

One reason newly built homes can be more affordable is that builders often include financial incentives to attract buyers. Here are some examples of these perks:

• Financing Incentives: Many builders have partnerships with specific lenders (called “preferred lenders”) and offer special financing deals to buyers who use them. This can include lower interest rates or assistance with closing costs, which are the fees paid to finalize a home purchase. These incentives can make monthly payments more affordable compared to buying a similarly priced preexisting home.

• Seller Credits: Builders may also offer seller credits, which means they cover some of the buyer’s closing costs. This can significantly reduce the upfront expenses of buying a home, making it easier for buyers to afford a brand-new property.

Why This Matters for You

If you’re thinking about buying a home, these trends could work in your favor. Smaller homes mean lower overall costs, from the purchase price to ongoing expenses like utilities and maintenance. And with many builders offering financial incentives, buying new construction might be more affordable than you think.

It’s also worth considering that newly built homes often come with modern designs and features, like energy-efficient appliances and open floor plans. This means you’re not only saving money but also getting a home tailored to today’s lifestyle.

Use Your Own Agent When Buying New Construction

When purchasing a new construction home, it’s important to understand the role of the builder’s agent. The builder’s agent works exclusively for the builder and is focused on the builder’s best interests—not yours. Their primary goal is to sell homes in that specific community, and while they may provide helpful information, their allegiance lies with the builder.

By contrast, having your own real estate agent ensures that someone is advocating for your best interests. Your agent is dedicated to finding the best deal and negotiating terms that benefit you. They work tirelessly to ensure you’re getting the home that fits your needs and budget—not just the builder’s goals.

Another key difference is knowledge. The builder’s agent typically has detailed knowledge about the community they represent but may lack insight into other housing options in the area. On the other hand, your agent—especially one from The McCarty Group, which specializes in new construction in Bakersfield and Kern County—has comprehensive knowledge of all the new housing tracts in the area. They can take you on tours of multiple communities, giving you access to a wider variety of options. This way, you’re not limited to a single development, and your agent’s motivation is to find the best home for you, no matter the location.

Lastly, using your own agent doesn’t mean missing out on the financial incentives builders offer. You’ll still be able to take advantage of closing cost credits, lower interest rates, and other perks offered by the builder’s preferred lender. Your agent can help you navigate these opportunities while ensuring you’re getting the best overall deal. With their guidance, you’ll have peace of mind knowing you’re making a well-informed decision.

The McCarty Group has agents who specialize in new construction in Bakersfield and Kern County. These agents understand the local market, can help negotiate favorable terms, and will guide you through the entire process, from selecting upgrades to understanding builder contracts. By having your own agent, you gain a knowledgeable ally who ensures you get the best deal possible and avoids potential pitfalls that come with buying directly through the builder’s team.

The Bottom Line

The shift toward smaller, more affordable new homes is opening doors for buyers in today’s market. Whether you’re a first-time buyer or looking to downsize, exploring new construction options could be a smart move. With potential savings on the purchase price and added financial incentives from builders, buying new might just be your best bet for making your homeownership dreams a reality.

If you’re ready to learn more about buying a newly built home or want to explore your options, reach out to The McCarty Group today by calling or texting 661-665-SOLD. Let’s find the perfect home for you!

Sources: Data referenced in this article was pulled from Realtor.com, the U.S. Census Bureau, and a 2023 study conducted by StorageCafe.