Goodbye Bathtub and Living Room. America’s Homes Are Shrinking.
Faced with high mortgage rates, cost-constrained Americans are embracing smaller homes
3 min
For many Americans, homeownership may be attainable only if they give up a dining room.
Home prices are near record highs, frustrating millions of potential buyers who feel priced out of the housing market. Home builders are having to find ways to make their product more affordable to increase their pool of customers.
Shrinking the size of a new single-family home is an increasingly popular way to do it. Smaller homes can help cost-constrained buyers facing high mortgage rates. They also boost the bottom line for builders who are contending with spiralling labour and construction costs.
Since 2018, the average unit size for new housing starts has decreased 10% nationally to 2,420 square feet, according to Livabl by Zonda, a listing platform for new construction homes. Construction starts for new single-family homes declined in 2022. But starts for homes with fewer than three bedrooms increased 9.5% over the same period, according to a Zillow report.
Home sizes are shrinking the most in some of the hotter markets of previous years. The Seattle area, where the size of newly built homes is 18% smaller than it was five years ago, tops the list. New homes in Charlotte, N.C., and San Antonio shrank by 14%, Livabl by Zonda said.
Most builders and architects follow the same basic playbook to produce tighter, more efficient living spaces. They are axing dining areas, bathtubs and separate living rooms. Secondary bedrooms and loft spaces are shrinking and sometimes disappearing.
At the same time, they are increasing the size of multiuse rooms like kitchens and great rooms. Shared spaces like bunk rooms and jack-and-jill bathrooms, which are located between and shared by two bedrooms, are on the rise. In some cases, the kitchen island has become the only eating area in the home.
Estridge Homes, a semi-custom new-home builder that operates near Indianapolis, recently launched a new neighbourhood concept with detached homes 300 to 500 square feet smaller and $50,000 to $75,000 cheaper than it typically builds.
The builder is slashing some bedrooms and bathrooms and trading some indoor living space for outdoor space. Lots in the neighbourhood are smaller too, but the builder is working with limited acreage by landscaping to create privacy.
Home buyers began moving in earlier this year, and demand has been strong from both entry-level buyers and empty-nesters.
Those two groups “are both big demographics,” said Clint Mitchell, chief executive at Estridge. “They kind of want the same thing.”
In December, Brad and Julie Redman downsized from their more-than 7,000 square-foot custom-built home to a 3,400 square-foot semi-custom model in Westfield, Ind., after their children left home.
Despite the smaller house and yard in a denser neighbourhood, the couple is happy with the decision. They gave up a formal dining area when they moved, but their new eating area easily converts to space for entertaining guests.
“We can use the same space for more than one thing,” Julie Redman said.
Shrinking homes are also beginning to reshape the furniture market. Companies like Bob’s Discount Furniture are creating designs suited to tighter spaces. Demand has increased for items with multiple functions, from kitchen islands with drawers and wine racks to sleeper sofas and smaller, drop-leaf dining tables, said Carol Glaser, executive vice president of merchandising at Bob’s Discount Furniture.
“If they are in smaller homes,” she said of her customers, “they need their furniture to work harder.”
Still, even smaller homes won’t make a big enough dent in the purchase price for most entry-level buyers or provide an answer to the nation’s severe housing shortage. Estridge’s semi-custom homes and townhomes, for example, still range in price between $400,000 and $800,000.
The share of new home projects priced below $400,000 has declined in nearly every major home-building metro since 2018, according to Livabl by Zonda. For entry-level buyers across the nation, the cost of owning a home increased 72% from February 2020 to May 2023, according to an analysis by John Burns Research and Consulting that estimates monthly payments, maintenance and other costs of ownership.
And the smaller floor plans usually mean that buyers are getting less space for their dollar. Lower list prices might make the overall price cheaper, but buyers are still paying more a square foot, according to the U.S. Census Bureau. Inflation-adjusted cost a square foot increased about 2.5% on average between 2012 and 2020. In both 2021 and 2022, it increased nearly 4%, according to John Burns Research and Consulting.
Builders have also ramped up activity for other cost-saving methods, like starting home construction off-site and building more attached homes. In Lexington, S.C., buyers are willing to share a wall with a neighbor when it saves thousands and makes homeownership more attainable.
Sonia Mendez, a real-estate agent in the area, said she has seen builders increase construction of 1,500 to 1,700 square-foot townhomes.
“They are being bought just as fast as the single family home,” Mendez said. “The first-time home buyers are excited. They don’t see a small home. They see it as a dream come true.”
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BNW Developments has established a Sydney presence, joining Arada and Sobha Realty among the growing number of UAE developers pursuing Australian buyers and development opportunities.
Australian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market. The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index. …
Continue reading “ASX falls 0.7 per cent as miners and property stocks retreat”
رغم التوترات الإقليمية، يواصل سوق العقارات الفاخرة في الإمارات جذب المشاريع الجديدة، مع تصدر الواجهات البحرية المشهد. وتستعد دبي وأبوظبي ورأس الخيمة لإطلاق مجموعة من المشاريع السكنية الفاخرة، بينها مساكن تحمل علامات فندقية عالمية مثل Ritz-Carlton وJanu.
6 min
Long-term optimism remains strong in the United Arab Emirates, even as the war in neighboring Iran hinders home sales and demand for now.
While there have certainly been residential and commercial real estate projects across the U.A.E. that have been paused or delayed due to the turmoil experienced across the region, by and large, new developments continue to be launched.
That’s the case in the luxury residences sector in particular, where a string of starry, big-name projects are putting homes on the market before the close of the year. One trend is that the islands of Dubai, Abu Dhabi and the U.A.E. at large that are taking their turn in the spotlight, as waterfront living continues to be in demand and come at a premium.
For would-be buyers looking for resort-style homes along the shores, there’s an array of upcoming projects to get excited about. Right at the top of the list are hotel branded residences from the likes of Ritz-Carlton and Janu, the sister brand of powerhouse Aman, among five swanky projects selling this season.
The Ritz-Carlton Residences Al Maryah Island, Abu Dhabi
Luxury hotel branded residences are thriving, and the exciting Ritz-Carlton Residences Al Maryah Island development is a great example of why. Residents can expect hotel-style amenities and services from a locale within Abu Dhabi’s thriving waterfront district, with the creature comforts of home built into it.
This project was unveiled at Abu Dhabi Finance Week 2025 and promises to offer The Ritz-Carlton brand’s signature, timeless style and unwavering attention to detail. All units will feature floor-to-ceiling windows with enviable views, while residents will be able to take advantage of a resort-grade, infinity waterfront pool, immersive spa and wellness facilities, and a waterfront promenade with curated outdoor spaces as well as high-end retail and dining venues.
Sales launch in October.
Number of Units: 172
Price Range: Starting at $1.2 million
Developer/Architect: Killa Design and Tara Bernerd, with SAAS Properties.
Home Sizes: One- to four-bedroom residences ranging from 882 square feet to 4,962 square feet, and a five-bedroom, 13,713-square-foot penthouse.
Amenities: Wellness facilities including premium fitness center, massage room, meditation and recovery rooms, cold plunge and indoor pool. There’s also a rooftop pool, co-working lounge, executive golf lounge, and a games room and children play area.
Janu Al Marjan Island, Ras Al Khaimah
Just 50 minutes from Dubai International Airport, Janu Al Marjan Island aims to both feel a world apart from the city, while also offering supreme ease of access. The property has its own private stretch of beach and marina, ideal for superyacht mooring and serving as the scene of a beach club.
The Janu Residences will be positioned next to the Janu hotel, with residents able to take advantage of its many social and wellness spaces, in addition to resident’s-only amenities and services. Meanwhile, the adjacent Wynn Al Marjan Island, the U.A.E.’s first integrated resort, is in direct proximity as well.
Social life by the sea, with discretion and wellness on tap, not to mention a chance to get in early on burgeoning Ras Al Khaimah.
Sales launch in late October.
Number of Units: 73
Price Range: Starting at $2.3 million
Developer/Architect: Jointly developed by Marjan and Wynn Resorts, with architecture by SCDA Architects.
Home Sizes: One- to five-bedroom residences ranging from 2,117 square feet to 18,955 square feet, as well as five Marina Villas and a residential tower penthouse.
Amenities: An active lifestyle comes to the forefront with the Janu Spa and Wellness center and a padel court. Six dining venues and a signature beach club are key features for residents who want it all, right on-site.
Sei Saadiyat, Saadiyat Cultural District, Abu Dhabi
Located in the Saadiyat Cultural District, Sei Saadiyat combines its historic locale with a unique spin rooted in the Japanese concept of stillness and calm, or “Sei.” That foundational principle is what this community will be based on, with a mission to foster wellness and relaxation in all forms, including fitness and social connection.
A total of 778 homes will be spread across six Jacobs-designed buildings. Aldar is also introducing a first in their residential portfolio in the form of their two-bedroom Kanso Lofts at Sei Saadiyat, featuring double-height, open-plan living in loft style spaces including an elevated bedroom.
Phase one sales launched in September.
Number of Units: 778 total (265 involved in this phase one launch)
Price Range: Starting at $800,000
Developer/Architect: Aldar with architecture by Jacobs and interiors by Kettle Collective.
Home Sizes: Residences range from 753 square feet to 2,238 square feet, in a range of floor plans including one- and two-bedroom apartments, three-bedroom Kanso Residences and two-bedroom Kanso lofts.
Amenities: Amenities tie into the brand’s ethos of stillness and calm: expect a Zen garden with serenity pool and outdoor yoga decks, along with numerous indoor and outdoor fitness areas, and hot-and cold-pool experiences.
Amali Canal Residences
Amali Canal Residences is located on Dubai Canal in Al Wasl. The community is suspended above the canal, and brings the presence of water even closer to home with a number of features including private plunge pools in every residence, and a swim-through, indoor-outdoor pool with a signature waterfall facade that would make the posh resorts of the Swiss Alps blush.
There will be no shortage of on-site entertainment and diversions, whether in the form of a private cinema and resident bowling alley, cigar lounge and library, padel and sports courts, a panoramic fitness center. Then there’s The Retreat, a wellness center incorporating spa, sauna, steam, onsen baths, hydrotherapy, and yoga and pilates studios. When it’s time for a bit of work in between the diversions, residents can use an executive boardroom, private studies and co-working lounges.
Sales launch in October.
Number of Units: 211
Price Range: Two bedrooms starting at $3.9 million; three bedrooms starting at $5.4 million; four bedrooms starting at $7.4 million; penthouse pricing on request.
Developer/Architect: Amali Properties in collaboration with AHS Properties, with architecture by Killa Design and interior design by HBA Residential.
Home Sizes: Two- to four-bedroom apartments ranging from 2,880 square feet to 7,800 square feet, in addition to four- and five-bedroom penthouses ranging up to 21,000 square feet.
Amenities: 55,000 square feet of interconnected amenity spaces including myriad lounges, infinity pools with cabanas, children’s waterpark and child care center, padel court and a rooftop secret garden.
Rixos Residences Al Reem Island, Abu Dhabi
The Rixo Residences on Al Reem Island, Abu Dhabi, are designed to match its island environs with the thriving culture and finance dynamics of the city. Panoramic water and skyline views bring both faces to life, in this East & West Properties project.
Residences showcase expansive terraces offering boundless views from within a community centered around three dedicated amenity zones: the Oasis, the Haven and the Gathering. Together, wellness, fitness, social life and relaxation are all available in a number of formats.
Less than half a mile from the coast, and only 10 minutes from downtown Abu Dhabi, Rixos Residences offers generous layouts and amenity-rich public spaces that deliver equally as well for family-friendly living as well as investors.
Sales launched in August.
Number of Units: 386
Price Range: One-bedrooms starting at $570,000, with larger loft units starting at $1.8 million.
Developer/Architect: East & West Property Development under the Ennismore portfolio, with architect Aedas and interiors by HBA Residential.
Home Sizes: One- to two-bedroom apartments as well as three- and four-bedroom lofts, from 954 square feet to 2,941 square feet.
Amenities: Wellness treatment areas as well as Turkish hammam and steam rooms, landscaped walking tracks, padel court, rooftop clubhouse and plunge pool, private cinema, and services including concierge, valet and security.
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