Homebuilders Shrink New House Sizes to Keep Costs Down Amid Rising Rates

Homebuilders are building smaller homes with less square footage to keep monthly payments affordable as interest rates rise.

The average new home size has dropped from 1,900 sq ft to 1,550 sq ft in some markets over the past 2 years.

Builders are adding duplexes and small-lot homes to increase density in response to higher rates.

Urban designs like alley garages and side yards instead of backyards are coming to exurban developments.

Key rooms like kitchens and primary bedrooms are being preserved while sacrificing dining rooms and kids' rooms.