McMansions, with their outsized proportions and price tags, are out. Instead, smaller homes are making a strong comeback—and there’s one feature designers are getting rid of to save space.
“The median price of homes for sale this June remained stable compared with last year, at $445,000,” says Realtor.com® senior economist Ralph McLaughlin. “However, the median price per square foot grew by 3.4%, indicating that the inventory of smaller and more affordable homes has grown in share.”
Not all buyers will likely be happy about homes’ shrinking, especially as one standard feature, namely hallways, is quickly disappearing, according to a recent Realtor.com report.
In a new survey, architectural designers say that new homes will continue to get smaller, with hallways becoming a thing of the past. Here are the upsides—and downsides—of America’s shrinking homes.
Smaller homes are cheaper
The good news is that losing a hallway or two might be a boon for a homebuyer’s bottom line.
The increase in budget-friendly homes priced in the $200,000 to $350,000 range outpaced all other price categories for the past five months. Homes for sale in this range grew a whopping 50% in June compared with last year.
That means buyers have way more homes to choose from at a friendly price range at a time when mortgage rates remain stubbornly high.
Buyers looking for smaller and more affordable homes should head South, the region that helped fuel the rise in this type of housing stock.
New-construction homes are also smaller
A single-family home newly under construction had a median 2,140 square feet of floor space in the first quarter of 2024, according to the U.S. Census Bureau. That’s 116 square feet smaller than the median size in 2023.
“In the new-home build market, builders are striving to meet the demand of smaller-square-footage homes,” says Jason Gelios, a real estate agent with Community Choice Realty in Southeast Michigan.
Gelios adds that the number of pre-existing small homes is lacking due to the popularity of McMansions before the COVID-19 pandemic.
“Since the trend is now heading toward smaller and more affordable housing, it makes sense that builders would follow suit,” he says.
More square footage, more problems
Smaller homes are attractive to those looking for both a lower list price and a lower cost of home maintenance.
“I work with plenty of buyers who downsize to avoid the maintenance and upkeep associated with larger homes,” says Cindy Allen, a real estate agent with DFW Moves in Dallas and Fort Worth, TX. “Lower heating and cooling costs are also a bonus.”
Another truth? Most homebuyers today simply don’t need as much space for their stuff, according to Bruce Ailion, a real estate agent and attorney with Re/Max Town and Country in Georgia.
“Years ago, we had televisions that were the size of large moving boxes, and we had stereo equipment with a turntable, tape player, and speakers the size of 10-year-olds,” Ailion says. “Today, the TV is flat against the wall, and all our music is in a smartphone in our back pockets.”
Homes aren’t done shrinking
According to a recent U.S. Residential Architecture and Design survey, new homes will continue to get smaller.
Jenni Nichols, vice president of design for John Burns Research and Consulting, who conducted the survey, says that 43% of production residential designers worked on smaller projects last year than the year before.
“And 27% of production residential designers reduced the size of projects they designed last year to save on costs,” she says. “Builders are trying to build homes that people can afford to buy since people have less buying power than they used to.”
In the survey, architectural residential designers said they were four times more likely this year to plan for smaller homes than larger ones.
“As home sites get smaller, homes are also getting smaller as a result,” she explains. “You can only fit so big of a home on a smaller lot.”
Why hallways are going away
As a result of this smaller-home trend, architectural designers said they will now design homes differently.
“Circulation space like hallways use square footage, while typically not providing any function, so they become one of the features that are easy to cut back on,” Nichols says.
Other space savers Nichols has seen designers incorporate include eat-in kitchens, pocket offices, and Jack-and-Jill bathrooms.
“As homes shrink, people want and need the square footage to go to places they use, not to wasted space,” Nichols concludes.
