Housing Affordability Pressures Spur Creative Home Solutions

ORLANDO, FL — Housing affordability continues to challenge the residential market, as home prices have climbed 53% since 2019 while median household income has risen only 24%, according to experts at the National Association of Home Builders. These shifts have contributed to a shrinking share of first-time buyers, which fell to 21% in 2025 from 44% in 1981, with the median age for first-time buyers hitting a record 40 years old.

For builders, these trends are reshaping how homes are designed, sized, and marketed to both entry-level and high-end buyers.

Home Sizes Stabilize, Focus Shifts to Flexibility

Median home size leveled off at 2,155 square feet in 2025, essentially unchanged from 2024. While square footage is not expected to grow significantly in 2026, builders are increasingly incorporating transition or flex spaces, such as drop zones, multi-purpose rooms, and electrical vehicle (EV) charging stations to meet buyer needs within budget.

“Clearly [affordability] will have implications on the size of homes we build and the types of amenities we include,” said Rose Quint, NAHB Assistant Vice President of Survey Research.

To improve affordability, 67% of builders are offering sales incentives and 41% have cut home prices, continuing a trend from 2024 aimed at helping entry-level buyers enter the market.

Tailoring Features for Entry-Level vs. High-End Buyers

Buyer priorities differ across price points. Entry-level buyers focus on practical spaces and efficiency, while high-end buyers demand more bedrooms, bathrooms, home offices, and premium amenities, including:

• Above-standard certifications for energy efficiency, indoor air quality, and water conservation

• Specialty kitchen storage

• Soundproof walls and floors

• Advanced home technology systems (lighting, energy management, security)

• Community amenities such as walking trails, parks, and nearby retail

Outdoor living continues to be a universally desired feature. Rooftop decks, patios, and landscaped common areas allow buyers to maximize usable space and support wellness-focused lifestyles.

“People want to be out, they want to be mobile, they want to be a part of their community,” said Don Ruthroff, Founding Principal at Design Story Spaces.

Elevation Designs Reflect Buyer Preferences

Builders are also adapting elevation styles to match buyer preferences, balancing traditional designs (favored by 50% of entry-level buyers) with contemporary styles (preferred by 57% of high-end buyers).

“When you’re thinking about elevation design, it needs to feel authentic to the style,” Ruthroff added. This helps ensure new homes integrate well into surrounding neighborhoods, particularly in suburban communities.

Innovative Approaches to Affordability and Supply

Builders are experimenting with creative solutions to address affordability and housing supply challenges, including:

• Adaptive reuse of commercial buildings or schools converted into housing

• Mixed-density developments like townhomes and condominiums to offer multiple price points

• Community-focused design emphasizing natural landscapes, parks, and trails over large clubhouses and pools

These strategies, combined with flexible interior layouts and wellness-focused outdoor spaces, allow builders to meet the needs of buyers across the market spectrum.

Additional data on home buyer trends is available through NAHB’s What Home Buyers Really Want, accessible at builderbooks.com.