PCS Resources

New Homes Can Offer Plenty of Value in a Small Package

2025-01-17

Servicemembers returning to the U.S. to work or retire may be surprised to find that new homes for sale are slightly smaller and cost less than they remember.

The average size of new single-family homes has been shrinking since 2015 when it peaked at 2,689 square feet. Prices have been trending down, too. In August 2024, the median listing price for a newly built home was $450,000, down slightly from July but down significantly from the $470,000 peak in July 2022. The reason is simple: Buyers want affordable homes. Other factors, such as interest rates, housing inventory, and economic trends also impact home prices. “It’s become money, money, money in trying to attract cost-conscious buyers,” says Tina Suiter, Corporate Communications Manager for Holiday Builders in Melbourne, Florida. “We’re looking for ways to build for value.”

In addition to offering affordability, newly built homes are usually ready to move into from day one, with minimal repairs or renovations necessary after purchase. This is particularly beneficial for busy military servicemembers who may have limited time to devote to home maintenance or improvements due to the unique demands of a military career.

A move-in ready house provides a smoother PCS transition to enjoy a new living space right away. Plus, many newly built homes are part of planned communities with pools, golf courses, or other recreational activities.

Competing on Value

Holiday Builders introduced its “Value Series” in 2019 with models ranging from 1,060 to 1,243 sq. ft. The homes are offered at an affordable price point because they cost less to build. For example, instead of a standard two-car garage, the garage accommodates one car, saving the builder on materials. “Buyers loved being able to afford new construction that offered the amenities they wanted without an inflated price tag,” says Suiter.

D.R. Horton, the nation’s largest homebuilder, has similarly introduced the “Express Series” of entry-level homes. The no-frills homes cost $150,000–$180,000, depending on the market, and the company says they are selling well in Texas, the Carolinas and Florida.

Alliance Real Estate’s Karen Cobb, a Realtor® licensed in both Florida and Alabama, sells about two a month. “Buyers really love the price point and the amenities that come with these homes including the smart home included in all D.R. Horton homes,” Cobb says. “Add to that the concessions and special financing of a large builder, like D.R. Horton, can offer to a buyer. For example, a 2-1 buydown with a starting interest rate of 4.99%.”

A 2-1 buydown is a mortgage financing option where the buyer receives a lower interest rate for the first two years of their loan, with the rate dropping by 2% in the first year and 1% in the second year, before reverting to the original, standard rate for the remaining loan term; essentially, it's a temporary interest rate reduction often used as a seller incentive to attract buyers, with the seller typically paying the upfront cost to fund the lower rates in the first two years.

For servicemembers who frequently move or who are transitioning to civilian life, builder incentives like special financing and concessions can make the homebuying process more affordable and accessible.

Living Large in Small Spaces

Although these newer homes are smaller, builders are offering several “value” amenities to make the most of limited square footage, including:

1. Flex Spaces

These small areas or “sometimes rooms” can be used however the occupants choose. Homeowners might use the area for storage at first and later repurpose it as a home office, gaming room or nursery. “The space’s function is easy to change along with the homeowner’s lifestyle choices and tastes. This is an extremely in-demand feature in South Florida right now,” says Suiter.

2. Open Floor Plan

Nearly 84% of new homes have an open floor plan, making them increasingly common in newly built homes. Fewer walls between the kitchen, living room, dining room, and other areas mean more “flow” inside the home. “People especially like being able to move from the kitchen to the living area, especially when they’re entertaining,” says Suiter.

3. Outdoor Living Space

“We’re seeing the blurring of lines between outdoors and indoors,” says Cobb. “The whole inside-outside thing is really big right now, regardless of climate.” Local builders stage models with firepits or fountains, she says, to give buyers ideas on how to use outdoor spaces.

4. Spa-Like Bathrooms

Fancy master bathrooms have become all the rage along with design elements like grab bars and wide hallways and doorways for aging-in-place. “This is especially important in Florida where people move to retire and live the rest of their lives,” says Cobb.

Related: Construction Loans From AMS

Financing Your New Home

When it comes to financing your new construction home, you have several options:

Government-backed loans: Programs such as VA Home Loans and FHA loans offer financing options for new construction with lower down payment requirements.
Traditional mortgages: Some lenders offer traditional mortgages for new construction homes, requiring a down payment and meeting certain credit score criteria.
Home equity loan or line of credit: If you already own a home, you may use the equity to finance the construction of a new home.
Builder financing: As described above, some builders offer financing options or partnerships with lenders to facilitate the construction financing process.

Before you choose a financing option, take time to shop around for lenders, get prequalified, and understand the terms and requirements of each loan type. These steps can help ensure a smooth financing process for your new construction home.

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New Homes Can Offer Plenty of Value in a Small Package

Competing on Value