Why shrinking home sizes could provide a silver lining for brokers, buyers

“It’s another example of how important it is to think about long-term recurring costs outside of just the mortgage payment,” he said. “A smaller home, even if you’re paying a little bit more per square foot for it, those things can be a little cheaper to keep cool when it’s 105 degrees out, and there are just fewer things to repair and maintain. Those reduced costs can really make a significant difference.”

He said that one way brokers can sell these smaller houses to homebuyers is to treat the purchase as a starting point rather than a final destination.

“Especially if the smaller home is just a starter home, keeping all of those costs down to the degree you can allows you to keep putting money aside,” he said. “You can potentially use that in however many years to upgrade to a little bigger home that might fit your family better.”

Making loan qualification easier

The connection between a smaller home and a smaller mortgage, Schulz said, gives brokers another selling point with homebuyers.

“I definitely think that’s the case,” he said. “It’s so easy to get stars in your eyes when it comes to buying a home, thinking that spending a little bit more and getting a little bit bigger house, thinking it through over 30 years, maybe the costs aren’t that significant. But especially in a time when affordability is such an issue, giving people options that help them keep things a little bit more affordable makes all the sense in the world.”