Tag Archives: homebuilders USA

Trend Alert: Let’s Talk Tiny Houses


What’s a Tiny House?

There’s a new trend that’s slowly taking the nation by storm and it’s all about tiny houses. And when we say tiny, we do mean really small and compact houses. All around the country, more and more people are trading in space for simplicity.

But first, let’s define what a tiny house is. Simply put, tiny houses or tiny homes refer to a small house that typically measures around 100 to 400 square feet. This is a stark contrast to the typical American home which is around 2600 square feet.

Tiny houses are also known as: micro houses, compact houses, mini houses, or little houses. Most of these structures feature an open floor plan for the first floor (living room, kitchen and bathroom), and usually, a bedroom or sleeping area up on a loft.

Small homes come in two kinds, the permanent standalone ones and the portable or movable ones on wheels. Obviously, the second type is inspired by RV living.

The typical demographic of tiny house owners are 1) young couples, 2) retirees-people over 50 years old, 3) college grads.

Buyer Motivations

While many people make tiny houses as their main residence, others purchase or build them in order to have: 1) a home office, 2) a guest suite, 3) a home for returning adult children, 4) a mobile home that will facilitate interstate travel.

Here are other reasons why buyers are going small:

  • Little to no debt (affordable)
  • Reduced carbon footprint, environmental reasons
  • Self sufficiency
  • Lower taxes
  • Fast build-time (2 months on average)
  • Lower cost for maintenance
  • Simpler lifestyle

The tiny house phenomenon is quickly catching on. According to studies, 68% of tiny house owners have no mortgage, compared to 29.3% of all U.S. homeowners. In addition, 78% of tiny house buyers completely own their home, compared to 65% of the owners of traditional houses.

People have even coined a term for the rising trend in smaller homes- they call it the Tiny House Movement.


Would you consider building tiny homes?

What about you, fellow builders? Would you consider adding tiny homes to your portfolio? They’re very easy to build and are attractive to various customer demographics.

It’s also a fun challenge in terms of design- managing good aesthetics with limited space and functionality. Is this feasible to your company as add-on side projects? If so, will you be able to juggle it efficiently with your major home projects?

US Homebuilders Reach Highest Confidence Levels Since 2005

Things are looking bright. The steadily improving US housing market is affecting home-builder sentiment in a positive way. The National Association of Home Builders (NAHB) released a statement last July 16, 2015 saying builder confidence in the market for newly-built single-family homes hit a level of 60 on the NAHB/Wells Fargo Housing Market Index (HMI). For reference, a reading over 50 means that most builders generally see conditions as positive. The reading for June was upward one point to 60 as well. This bodes well for the market since the last time the HMI reached this level was way back in November 2005.

NAHB Chairman Tom Woods said, “The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace.” Woods further added that as we head into the second half of 2015, we should expect a continued recovery of the housing market.

Stronger sales and continued job growth, these are two of the reasons for the extremely positive outlook of US homebuilders. According to NAHB Chief Economist David Crowe, despite this, builders still face a number of challenges including shortages of lots and labor.

Recovery is continuous process however. “This month’s new-home sales report is consistent with other government data and rising builder confidence that indicate a continual recovery of the housing market,” added Crowe. “The uptick in existing-home sales bodes well for builders, as it shows that the sellers are able to buy a new home.”

The market is looking bright and the industry is very optimistic. The question now is, what are your plans on how to ride this wave?

Notes: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.