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Why are U.S. homes getting smaller?
The average-sized household continues to shrink despite an increase in adults sharing a home, more so than in previous decades. This new trend is causing an increased demand for smaller homes, as U.S. homebuyers prioritize practicality.
There are multiple reasons for this paradox: The number of adult children living with their parents is rising; divorce rates have decreased, so more married couples are living together. Additionally, the number of children per household is lessening and the number of seniors is increasing, with many of them living alone.
According to John Burns Researching and Consulting, since 2010, the average household has shrunk from 2.54 to 2.42 people. As the average-sized household continues to shrink, the need for smaller homes in the U.S. market is rising.
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U.S. home sales see modest gains in September
According to Redfin’s Home Price Index, on a seasonally adjusted basis, U.S. home prices increased 0.25% month over month in September. Although home sale prices rose slightly from 0.21% the previous month, home sale growth is in line with the modest gains seen in the U.S. housing market.
According to the report, home prices rose in 34 of the 50 most populous U.S. metros month over month in September, with home prices rising most in Pennsylvania. In Philadelphia, home prices rose 1.9% month over month on a seasonally adjusted basis.
Home prices fell in 16 of the 50 most populous U.S. metros, with the biggest price declines happening in Fort Worth, Texas.
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Dream Finders Homes seals $2.2 billion Beazer Homes deal
Dream Finders Homes has openly eyed Atlanta-based, energy-efficient homebuilder Beazer Homes since February of 2026. On Oct. 20, 2026, Dream Finders finally closed on the $2.2 billion deal.
This marks the ninth acquisition for the Jacksonville, Fla.-based Dream Finders since 2021. The company is now expected to be the sixth-largest homebuilder in the nation.
“Today, Beazer’s teams officially join ours, and the real work begins. We are closing this transaction in a challenging housing environment and we are clear-eyed about that,” said Patrick Zalupski, Founder, CEO, and Co-Chairman of Dream Finders.
It remains unclear if Dream Finders will continue the energy-efficient legacy left by Beazer. They have not yet responded to a request for comment.
Dream Finders affirmed that this deal will provide leverage in the current market; it also expanded its homebuilding presence into four new states.
“This combination is built to perform throughout the housing market cycle,” said Rick Beckwitt, Co-Chairman of Dream Finders. “We continue to expect over $100 million of annual run-rate cost synergies and double-digit percentage EPS accretion in year one, while expanding our financial services platform and preserving the asset-light model that underpins our returns.”
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Mortgage rates hold steady
Freddie Mac’s Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) is holding steady, averaging 7.40%.
“The average 30-year fixed-rate mortgage remained unchanged this week,” said Sam Khater, Freddie Mac’s Chief Economist.
As of Oct. 15, 2026, the FRM held steady at 7.40%, up from last year’s average of 6.27%.
The 15-year FRM averaged 6.71%, down from the previous week’s average of 6.73%. A year ago at this time, the 15-year FRM averaged 5.52%.
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NKBA Kitchen Trends Report: Functional features, wellness design and cool neutrals dominate
What’s next for kitchen design? The National Kitchen & Bath Association (NKBA) released its Kitchen Trends Report, giving insight into the shifts we’re likely to witness in 2027.
One of the major takeaways from the report is that kitchen layouts are shifting: moving away from fully open-concept spaces and towards more dedicated prep spaces such as a scullery. A slight majority of designers (52%) predict kitchens will become a larger foodprint inside the home in the next three years.
The respondents noted that the kitchen is becoming a utility space for homeowners, with a focus on lifestyle and functional design. Popular integrations on the rise include dedicated beverage stations (90%), mudrooms and flex spaces (94%), pet feeding stations (63%) and smart appliance stations (73%).

As for color palettes, experts responded that cool neutrals are here to stay, with greens (83%) and blues (75%) the top color choices. Moving toward material selection, quartzite is king, with 78% of designers naming it the most popular countertop choice.
Smart home integrations are less focused on Artificial Intelligence (AI), but responsive to wellness and climate demands.
Only 27% of designers see an upward trend of ovens with food-recognition AI and 24% expect AI that learns and adjusts to cooking preferences. However, designers noticed an increased priority for leak detection systems and automatic shut-off valves (65%), backup power solutions (62%) and pointing to ventilation and air filtration systems (53%).
“For the past several years, we’ve seen the kitchen expand in size. The 2027 Kitchen Trend Report reveals that this evolution is continuing, with the kitchen extending into more areas of the home,” said Bill Darcy, Global President & CEO of NKBA. “While the kitchen has always been the ‘heart of the home,’ that idea has taken on new meaning. From mudrooms and laundry rooms to back pantries and personalized work zones, the report shows that we’ve entered a new era of what the kitchen can do for homeowners – solving real problems, adding home value and elevating the way we live.”
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These 7 colors will define 2027 bedroom interiors
As 2027 draws closer, interior design trends are evolving, especially in color schemes. Homeowners are already gravitating towards interiors that evoke warmth and tranquility. Interior designers are expecting this trend to become extremely prominent in bedrooms, spaces where homeowners seek to refresh and unwind at the beginning and end of their day.
Creamy whites and beiges are continuing to remain dominant next year, according to Co-owner and Principal Designer at Tran + Thomas Design Studio Jill Tran.
“I feel we will forever be using creams as they remove the fear of committing to color, and for a lot of people, that speaks to their hearts,” said Tran.
Interiors, especially luxury ones, are going darker in 2027 with chocolate browns and blue-gray tones.
Earthy greens, beige and taupes, as well as clay, terracotta and muted reds inspire wellness and feel soothing; these are the feelings homeowners are expected to chase next year.
These rising trends in bedroom design are in line with our 2027 Colors of the Year forecast.
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Upcoming kitchen designs for 2027
It’s official: kitchen designs are going warmer in 2027. From darker wooden cabinetry to warm natural elements, next year is expected to move further away from sterile gray tones and sleek, refined interiors. Homeowners want spaces that emphasize warmth, functionality and personalization.
Pantry and larder storage will remain a priority in 2027, but the inside will receive the same detail that the outside does. Storage does not have to mean clutter; efficient but aesthetic displays and shelves will take center stage in cabinetry next year. Designers and manufacturers are expecting more emphasis on storage that responds to the way clients cook, with smaller internal drawers sitting behind larger drawer fronts for a simple exterior.
Built-in seating has become more prominent in kitchens throughout 2026, but it is expected to become one of the most desirable features in 2027. Built-in seating at kitchen dining tables encourages socialization and makes the space feel less cluttered, since the seating is against a wall rather than in the center of a room.
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NKBA Kitchen Trends Report: Functional features, wellness design and cool neutrals dominate
What’s next for kitchen design? The National Kitchen & Bath Association (NKBA) released its Kitchen Trends Report, giving insight into the shifts we’re likely to witness in 2027.
One of the major takeaways from the report is that kitchen layouts are shifting: moving away from fully open-concept spaces and towards more dedicated prep spaces such as a scullery. A slight majority of designers (52%) predict kitchens will become a larger foodprint inside the home in the next three years.
The respondents noted that the kitchen is becoming a utility space for homeowners, with a focus on lifestyle and functional design. Popular integrations on the rise include dedicated beverage stations (90%), mudrooms and flex spaces (94%), pet feeding stations (63%) and smart appliance stations (73%).

As for color palettes, experts responded that cool neutrals are here to stay, with greens (83%) and blues (75%) the top color choices. Moving toward material selection, quartzite is king, with 78% of designers naming it the most popular countertop choice.
Smart home integrations are less focused on Artificial Intelligence (AI), but responsive to wellness and climate demands.
Only 27% of designers see an upward trend of ovens with food-recognition AI and 24% expect AI that learns and adjusts to cooking preferences. However, designers noticed an increased priority for leak detection systems and automatic shut-off valves (65%), backup power solutions (62%) and pointing to ventilation and air filtration systems (53%).
“For the past several years, we’ve seen the kitchen expand in size. The 2027 Kitchen Trend Report reveals that this evolution is continuing, with the kitchen extending into more areas of the home,” said Bill Darcy, Global President & CEO of NKBA. “While the kitchen has always been the ‘heart of the home,’ that idea has taken on new meaning. From mudrooms and laundry rooms to back pantries and personalized work zones, the report shows that we’ve entered a new era of what the kitchen can do for homeowners – solving real problems, adding home value and elevating the way we live.”
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Housing market could stabilize within 5 years
According to Redfin, housing costs could stabilize within the next five years if mortgage rates fall to 6% and home price growth remains steady. On the other end, the housing economy could stabilize at a slightly longer rate, six years, if mortgage rates remain the same, at about 7.5%, and home price growth flattens.
“Many house hunters feel stuck between two bad options: Stretch themselves to buy at today’s rates or wait for lower rates only to see prices climb further out of reach,” said Redfin Senior Economist Asad Khan. “But prospective buyers shouldn’t get hung up on timing the market. These hypothetical scenarios should give would-be buyers and sellers some hope that the market can normalize with only modest changes in rates or prices.”
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Private residential construction spending rises in August
According to the latest construction spending data from the U.S. Census Bureau, private residential construction spending came in at a seasonally adjusted annual rate of $882.3 billion in August 2026. This is up 1.1% from July but down 4.8% from the previous year.
All residential sectors saw an increase, but remodeling posted the largest monthly gain at 2.5%. Spending on single-family and multifamily construction increased by 0.2% in August, but decreased 3.5% and 0.6% from 2025, respectively.
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Economic growth increases in 44 states in Q2
According to the latest estimates from the U.S. Bureau of Economic Analysis, Real gross domestic product (GDP) increased in 44 states and the District of Columbia in the second quarter of 2026. GDP growth ranged from a 4.0% annualized increase in New York to a 2.3% decline in West Virginia, pointing to continued regional differences in economic performance. Most states recorded positive economic growth despite ongoing pressures from elevated prices and interest rates.
For the housing market, differences in state-level economic activity have important implications for housing demand: Stronger local economies generally support household income and employment, while weaker economic conditions can weigh on housing activity.
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Consumer confidence softens in September
Consumer confidence decreased in September 2026, according to the Consumer Confidence Index. The index is a survey measuring how optimistic or pessimistic consumers feel about their financial situation, consisting of two components: how consumers feel about their present situation and their expected situation. This index fell from 89.4 to 81.9 in September, the lowest level since April 2014.
The Conference Board also reported the share of respondents planning to buy a home within six months. Those planning to buy a home rose slightly to 5.4% in September. Of the 5.4%, the shares planning to buy a newly constructed home and an existing home decreased to 0.4% and 2.4%, respectively. The remaining 2.6% were planning to buy a home but were undecided between new or existing homes.
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HUD and USDA agreement to streamline housing standards
The U.S. Department of Agriculture (USDA) and the U.S. Department of Housing and Urban Development (HUD) signed a Memorandum of Understanding (MOU) to streamline housing standards, including environmental review, environmental impact, environmental regulations and physical inspections. The MOU aims to advance housing development and increase supply.
“The National Association of REALTORS (NAR) applauds HUD and USDA for streamlining environmental reviews and inspections, reducing regulatory barriers and advancing housing development,” said NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn. “This action is an important step in implementing the 21st Century ROAD to Housing Act and building momentum toward reforms that reduce costs and increase housing supply. NAR helped shape the legislation and will continue working with federal agencies and regulators to advance policies that break down barriers to housing and homeownership.”
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