Smaller, smarter and outdoors-focused: how builders are adapting to buyers’ changing tastes
As affordability challenges and demographic shifts impact what is desirable and attainable for homebuyers, builders are quietly reshaping what the “typical” home looks like in America.
New data from the National Association of Home Builders shows some clear patterns: Homes are getting smaller, floor plans are becoming more efficient and feature-packed, and outdoor spaces now outnumber less functional amenities.
“Smaller and sexier. Floor plans are getting smaller, but because they are getting smaller, they need to have more functions. They need to be more interesting. They need to make better use of space,” Donald J. Ruthroffsaid an architect in the San Francisco Bay Area, in a presentation at the International construction fair in Orlando, Florida, on Wednesday.
During the session, Pink Quintassistant vice president for survey research at the NAHB, said that while new homes are shrinking in terms of square footage from their pre-pandemic peak, builders are adding more features in response to consumer tastes.
According to an NAHB analysis of Census Bureau data, the average size of a new home in 2025 was about 2,155 square feet, about 3,000 square feet less than a decade ago, when a typical home was 2,475 square feet.
Buyers are also increasingly opting for homes with three bedrooms. By 2025, 47% of new homes would have three bedrooms, the highest share since 2011.
Meanwhile, the proportion of new four-bedroom homes has fallen to just 32%. Bathrooms are changing in the same way: 65% of new homes now have just two full bathrooms, and the proportion with three bathrooms is declining.
These changes reflect both affordability constraints and the evolving demographics of homebuyers, with more single-person households, fewer families with multiple children, and the average age for both marriage and homeownership continuing to rise.
Key home features for entry-level versus high-end buyers
Quint’s buyer research shows a sharp contrast between what entry-level and high-end buyers consider non-negotiable.
Buyers of luxury and luxury goods are “demanding,” according to Quint. They rate 69 different features as “highly desired” (indicating that more than 75% of respondents consider them essential) in kitchens, green features, technology, outdoor spaces and specialty areas such as home offices.
“We gave these buyers over 200 home and community attributes, and what we found is that high-end buyers have very, very strong preferences for dozens and dozens of attributes,” Quint said.
Entry-level buyers, on the other hand, are much less demanding, rating only a handful of features as essential.
“Your entry-level buyer understands their situation a lot better. For this group, there are only 18 absolutely essential, must-have features,” says Quint. “Everything else is negotiable. They are looking for affordable housing.”
The priorities for entry-level buyers are simple and practical, with an emphasis on amenities like eat-in kitchens, walk-in closets, laundry rooms, some garage storage, and a handful of energy-efficient upgrades like Energy Star-rated appliances.
Many nice-to-have items, such as elaborate smart home systems or exotic finishes, fall off the list if they potentially put the price of the home out of reach.
Yet one feature is considered essential across all price ranges: a full bathroom on the main floor. Both first-time and high-end buyers say this is critical, whether for aging, multi-generational living or ease of entertaining guests.
“If you as a builder are considering removing the full bathroom on the main floor to save money… I would encourage you to reconsider because first-time homebuyers, first-time buyers and high-end buyers really want to have their full bathroom on the main floor,” Quint said.
Outdoor space becomes the second living room
As interior floor plans tighten, outdoor spaces are where many builders are adding value, and another area where buyer preferences consistently align across all income levels.
The NAHB survey data shows that both first-time and higher-end buyers have a strong preference for homes with patios.
front porches, decks, back porches, landscaping and outdoor lighting.
“Outdoor facilities are important for both groups of people,” says Quint. “This is where I would focus any extra money you have on adding some of these features to the house.”
As for the design, Ruthroff argued that outdoor space has essentially become a second living and dining space for families, and homebuilders should treat it as such, even on small lots.
In model homes, that means fully designing compact backyards, side courtyards and patios to demonstrate how they can function as everyday living spaces.
“I encourage you to really beautify it, really show people that that smaller space is still incredibly useful, because they want it,” Ruthroff said. “It’s now the second living space. It’s now the second dining space. And they want that too, so make sure they can see it.”
In denser urban projects, where backyards are rare, roof decks are increasingly the solution. From rental communities in Tempe, Arizona, to new townhomes and multifamily projects in cities like Sacramento, CA, and Nashville, TN, rooftop decks now house pools, lounges, dog runs, and communal gathering areas.
“You can see how important roof space has become in the urban context,” says Ruthroff. “It’s expensive, I know, but it’s important when you get into a bad situation to still think, ‘How do I get my homeowners out?’”
‘Smaller and sexier’ floor plans
Indoors, builders are adapting to shrinking floor plans by making every square foot work harder.
Instead of long hallways or oversized formal rooms, modern plans favor open great rooms, L-shaped living and kitchen layouts, and compact but functional kitchens with islands and walk-in pantries.
“Pre-show function,” Ruthroff said. “The idea that the kitchen is a showpiece is important, but it must also really function, because it is often smaller than before. So more needs to be done.”
For buyers, the net effect is a marked shift away from rough dimensions and less-used formal rooms, and more emphasis on functionality, storage and smart layouts that suit how people actually live and what they can realistically afford.
