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Back in March, Stuart Miller, the co-CEO of Lennar, a large publicly traded homebuilder, had a message for investors during the company’s Q1 earnings call. There is ample demand for single-family new construction in the housing market, Miller said, provided it is offered at the right price point.
“The general theme remains primarily focused around very strong demand for housing, limited by the chronic housing shortage that is particularly problematic for working-class families and their ability to find affordable or attainable supply,” Miller told investors. “Demand for that product remains robust if it can be built at an attainable price point.”
One way that Lennar is trying to unlock that demand in the housing market is by building smaller homes. In pockets of Texas, the company is testing new home designs to gauge just how small single-family buyers might be interested in going.
Jon Greany, managing partner at North Star Property Solutions, shared with ResiClub some images he captured of smaller homes being constructed by Lennar, located 43 miles north of downtown Dallas in a new community called Foree Ranch.
The home design above, which Lennar calls its Rincon model, features 3 bedrooms and 2.5 baths, and it spans 1,376 square feet.
Lennar doesn’t currently list prices for the community, although Greany estimated it to be priced around $250,000 to $299,000.
“For an entry level buyer or someone downsizing into something lower maintenance it makes a lot of sense right now,” Greany wrote on X.
In terms of small builds, this one isn’t that small compared to Lennar’s Elm Trails community in San Antonio, Texas. In that community, there were single-family homes of 661 square feet listed for $159,999.
And isn’t just Lennar. Last month, D.R. Horton CFO Bill Wheat told investors on the company’s earnings call that, “We have reduced the prices and sizes of our homes where necessary.”
According to Parcl Labs, the median square footage for new construction fell from 2,098 in 2022 to 2,036 in 2023. That 3% year-over-year decline marks the biggest single-year dip in the housing market over the past 10 years.
