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Thursday, April 10, 2025

Downsizing the Dream: Why Millennials Are Opting for Smaller Homes

For many young people, homeownership is still an essential aspect of the American dream. While Gen Z is just starting to dip its toes into the housing market, millennials have now become the largest group of home buyers in the United States. As of 2024, 38 percent of home buyers were between the ages of 25 and 43.

As this new generation of homeowners continues to buy into the market, the housing industry may have to shift some long-held practices to accommodate these younger buyers. Here’s a look at what millennials care about most when buying a home and what the housing industry can do to meet their expectations.

Does Square Footage Still Matter?

Having the biggest house on the block has been a status symbol since, well, the invention of houses and neighborhoods. But while millennials still want big houses, size is not the be-all and end-all it once was.

According to recent data from the National Association of Home Builders, over fifty percent of millennial home buyers said they would prefer a smaller home with high-end amenities over a larger home with fewer amenities. Millennials also tend to prioritize convenience and location over home size, favoring shorter commutes over larger homes.

But that’s not to say that size does not matter at all to millennials when they’re looking to purchase a home. In fact, the NAHB notes that millennials are looking for a median of 2,408 square feet, which is the most interior space requested by any generation. Clearly, square footage is important— it’s just not the generation’s number one priority.

Are Homes Getting Bigger or Smaller?

So millennials prioritize high-quality amenities over square footage in a home—but are home builders responding to these trends? According to data from the U.S. Census Bureau, builders are starting to build smaller homes on average. From 2019 to 2022, the median home size was consistent at 2,300 square feet. From 2023 to 2024, the median home size dropped down to 2,150 square feet—the lowest in fifteen years.

“Buyers are willing to make compromises to find the best possible home for their families,” said NAHB Chairman Buddy Hughes. “Our nation’s builders are willing to meet buyers where they are and construct a high-quality home to meet their family’s needs.”