Small Homes Are Cool Again, According To New Research

At the height of the pandemic, most of us were trying to escape big cities and move into larger spaces with plenty of room to spread out. Now, new research suggests that trend is starting to reverse, with smaller homes being desirable again.

Zillow found that the market for homes under 1,000 sq ft. is now outperforming the market for large homes bigger than 3,000 sq. ft. Plus, prices are rising dramatically.

Zillow reports that small home prices are up 13.2% since last year, while larger home prices are only up 5.3%.

Part of this trend can be attributed to sustainability — small homes use much less energy than large homes — but affordability is another major factor, especially considering today's high interest rates. According to Zillow, current interest rates are 45% higher than they were a year ago. Yikes.

While smaller homes are typically more sustainable and affordable than larger ones, they are slightly more challenging to decorate. With a smaller space, homeowners have to get more creative and intentional about the way they work with color, style, and scale to create a cohesive and functional space. However, there is plenty of inspiration out there to make this process easier and even fun.