The housing market is going through major changes. Buyers want more than just four walls and a roof—they’re looking for smart design, weather-ready construction, and new ways to afford a home. Builders are responding with new methods, materials, and ideas that meet today’s needs and tomorrow’s challenges.
Whether it’s smaller homes, eco-friendly building materials, or built-in smart home technology, the future of home construction looks very different than it did just a few years ago.
Smaller Homes Are on the Rise
Big homes are out. Smaller, more affordable single-family homes are trending across the country. Why? Buyers are feeling the pinch of high prices, and builders are shifting their approach to meet demand. "[Small homes are] a smart response to rising rates and costs, explained Brett Sobol, Director of Partnerships and Business Development at Hippo Insurance. "Builders are scaling floor plans to protect affordability while still delivering the emotional value of homeownership."
In 2023, the average new home was about 2,411 square feet—down from a peak of 2,689 in 2015. Builders like D.R. Horton are adjusting their designs to match this trend. The company cut home sizes and saw success with budget-conscious buyers looking for long-term value. This shift isn’t just about saving space; it’s about making homeownership more accessible.
Outdoor living spaces are one place buyers continue to compromise. While indoor living space may be limited, access to a separate living area outside has a major impact.
Climate-Ready Construction Is Becoming Standard
More homeowners are worried about storms, wildfires, and other extreme weather. Builders are listening. They’re using stronger materials and smarter design to make residential construction safer. "Rebuilding after a disaster is traumatic and expensive," highlighted Sobol. "Forward-thinking builders are designing homes to survive the first time, reducing future losses and preserving homeowner confidence."
Some of the most common upgrades include:
- Fire-resistant siding and roofing
- Impact-resistant windows
- Reinforced foundations and framing
- Ember-blocking vents and sealed eaves
In places at high risk for natural disasters, builders are even changing how entire communities are designed—using fewer gas lines, improving drainage, and clearing vegetation that can fuel fires. These changes in thoughtful design are starting to become the norm, not the exception.
Modular and Prefab Builds Are Gaining Ground as an Innovative Solution
Faster construction. Less waste. Lower costs. That’s the promise of modular and prefabricated homes.
Unlike traditional building, modular homes are built in sections at a factory and assembled onsite. "Modular construction is proving that speed, strength, and sustainability don’t have to be trade-offs," shared Sobol. "Builders like Veev and Onx Homes are rewriting the rules, delivering climate-resilient homes that are built faster, perform better, and cost less to maintain."
This major trend is catching on fast. Builders can cut timelines by as much as half while reducing waste, reducing labor costs, and controlling quality.
Some builders are going all-in. Lennar, a top U.S. homebuilder, bought a modular startup to stay ahead of this trend. The global market for modular homes is also growing fast—it’s expected to reach $140.8 billion by 2029. As material costs rise and labor shortages continue, expect to see more homes built this way.
Green Building Is More Than a Buzzword
Energy efficiency and eco-friendly materials aren’t just nice to have—they’re becoming a big selling point.
Nearly a quarter of builders said most of their 2023 projects met high green standards. That’s a huge leap compared to remodelers. These builders are using better insulation to reduce energy costs, low-energy HVAC systems, and materials that last longer and create less waste. Some homebuyers seek biophilic home design, others demand sustainable design and built-in features.
"Today’s most-wanted home features, like energy-efficient windows, home battery storage, and smart energy monitoring, aren’t just good for the planet," noted Sobol. "They help homeowners control costs and unlock long-term value from day one."
Yes, these features cost more upfront, but energy savings compound over time. That cost savings is making green building more popular with buyers.
Smart Homes Are Getting Smarter
From thermostats to lighting to security, smart technology is now a major part of new construction. AI is making these systems even more useful—and more appealing to buyers.
"Buyers want homes that feel smart," observed Sobol. "AI tools that anticipate needs, reduce risk, and simplify everyday living are becoming the new standard in design and safety. For builders, offering flexible and interoperable technology options can help ensure these innovations add value without limiting buyers’ choices."
Younger homeowners especially want tech that makes life easier. Builders are using platforms like Control4 to manage everything from lights to speakers. On the job site, AI-powered cameras are helping keep workers safe by spotting risky behavior in real time.
The smart home market is already huge and growing fast. Based on current trends, it's expected to top $170 billion in 2025. Builders who make tech part of their homes from the start will likely see a competitive edge for innovative design.
Embedded Insurance Is Smoothing the Buying Process
"Home insurance used to be an afterthought—a closing table headache that frustrated buyers, builders, and lenders alike. But today, it’s become something worse: a dealbreaker," warned Sobol. "Embedded insurance helps preserve the joy of homeownership by making coverage fast, seamless, and a natural extension of the buying journey, not a barrier at the end. It saves buyers hours, if not days, of paperwork and comparison shopping so they can stay focused on moving in to their new home."
It's a trend we should expect to see: Builders including insurance as part of the buying process.
Instead of leaving buyers to figure it out later, insurance is built into the deal. This saves time at closing and reduces last-minute delays. It’s one less task for buyers, and it helps builders finish deals faster. Everybody wins.
Common Features Homebuyers Are Asking for in 2025
Buyers today want homes that feel safe, save energy, and work better for busy lives. Here are some of the top features shaping new home construction:
- Smaller floor plans to reduce costs
- Fire- and storm-resistant materials
- Solar panels and energy-efficient HVAC
- Modular construction to speed up move-in
- Smart thermostats, lights, and locks
- Flexible spaces for remote work or guests
- Pre-packaged insurance to simplify closing
What Will Homes Look Like 10 Years From Now?
Will we see fully self-powered homes with no utility bills? Could homes be built in days instead of months... with more use of natural materials? Will smart features become standard instead of special?
The way we build is changing quickly—so are the homes themselves. Watching where these trends go next might give us a glimpse of what tomorrow’s eco-friendly homes and neighborhoods will look like.
