Buyers Compromising on Lot & Home Sizes to Achieve Ownership

Buyers Compromising on Lot & Home Sizes to Achieve Ownership

June 06, 2024, from Floor Focus FloorDaily News

Washington, DC, June 4, 2024 – High mortgage rates and double-digit growth in home prices since Covid-19 are putting buyers in a position to compromise on lot sizes and shrink their square footage to buy a home they can afford, according to survey results from National Association of Home Builders’ (NAHB) What Home Buyers Really Want, 2024 Edition.

“Buyers place a high value on homeownership and are prepared to make significant compromises to invest in their future,” said Carl Harris, chairman of NAHB and a custom homebuilder from Wichita, Kansas. “Homebuilders are willing to meet this demand but are hamstrung by a mix of regulatory burdens. Housing industry leaders are ready and willing to work with policymakers to find concrete solutions to help more families achieve the American Dream.”

Nearly four out of ten buyers would be willing to give up land in exchange for owning a home and more than a third (35%) will accept a smaller house if that’s what it takes to buy it. Yet, ineffective zoning plans make it harder and more expensive for builders to construct smaller homes on smaller plots of land.

NAHB recently released a ten-point housing plan to offer solutions for lawmakers to improve housing affordability. The plan included a recommendation for local and state governments to reduce minimum lot sizes, allow more accessory dwelling units and promote missing middle housing (e.g., duplexes and townhomes). Missing middle housing can assist in both increasing the number of units built and units available in a wide variety of price points.

The value Americans place on owning their home continues even through challenging times. According to a recent Federal Reserve Bank of New York survey, more than two-thirds (67%) of Americans say that housing is a good investment. Another Federal Reserve survey, which examines household balance sheets, shows that homeownership is key to building household wealth. For families that owned a home, the median net housing value increased from $139,000 in 2019 to $201,000 in 2022, as home prices rose, and home mortgage debt was approximately flat.