It's happening right now ... Market developers are building more homes with millennials in mind It could be that builders are taking a cue from retirees and millennials. They both want a reasonably sized home that's beautiful and comfortable but costs less than the new homes builders have been constructing. In some areas, high home prices have almost closed off the new-home market to young buyers, but that's changing fast. Local builders and national companies are now offering entry-level homes. They can cost about 30 percent less than a builder's other offerings. As one builder put it, there are only so many people who can afford to buy a home for $400,000. So they are building homes that will cost much less. Many millennials are willing to sacrifice luxury for affordability. One couple quoted in Bloomberg Businessweek bought a home with particle board cabinets and a small yard, but the price was right and they wanted to build home equity. They say that after they have kids, they can buy their dream home with a big backyard. At that time they will be making a lot more money. A time to buy now? Real estate advisors say that if a millennial or retiree can find an entry-level home they like and can afford, it would be a good time to buy it. Everything related to homes could rise in the future, including land prices and mortgage interest rates. The Federal Reserve has begun raising interest rates for the first time in seven years, which could nudge mortgage interest rates higher.