Compact equipment market surges as lot sizes shrink

Construction equipment dealers are seeing a surge in compact machinery demand as residential lot sizes shrink across the United States.  

Mini excavators, mini skid steers, compact track loaders and compact backhoes are proliferating at construction sites due to their ability to navigate tight spaces. These machines are also imperative for meeting regulatory changes tied to emissions standards and noise restrictions.  

For these reasons, the global compact construction equipment market is projected to grow nearly 19% to $70.3 billion by 2030, according to a study released Sept. 17 by research firm Research and Markets.  

In many instances, compact machines are significantly less expensive than larger models. For example, the average price of a used mini excavator typically ranges between $15,000 and $40,0000, while large used excavators range from $50,000 to $200,000, according to Dunmore, Pa.-based dealership Five Star Equipment.  

Further, used mini excavator inventory decreased 22% year over year in August, following a 20% YoY decline in July, according to Sandhills Global. 

This market is benefiting from strong rental demand and opportunistic lenders, Sandhills Global Equipment Lease and Finance Manager Jim Ryan, told Equipment Finance News.  

“The appetite on the finance side for yellow iron is extremely high. That’s what everybody wants right now.” 

— Jim Ryan, equipment lease and finance manager, Sandhills Global

Increased prevalence of smaller machines reflects a broader shift in the construction industry, Matthew Isgrig, a sales representative at Landmark Equipment in Fort Worth, Texas, told EFN.  

“I’ve been around construction my whole life,” Isgrig, 49, said. “I grew up in a construction family, and I remember there wasn’t anything small when I was young. There’d be a couple of huge machines trying to operate in a small space, jammed in between some buildings. … It wasn’t practical, but it’s changed quite a bit over the past 15, 20 years.” 

Shrinking lots need smaller equipment 

Two-thirds of new, single-family homes sold in the U.S. in 2024 occupied lots smaller than 9,000 square feet, and 40% occupied lots under 7,000 square feet. These match the 2023 record in terms of market share for lot sizes that small, according to the National Association of Home Builders (NAHB). Sales of new, single-family homes with lots smaller than 7,000 square feet increased to 40% in 2023 from 27% in 2010, according to NAHB.  

While large machinery is necessary for the initial phase of a construction project, such as land clearing and earth moving, later stages have “moved more toward the mini” equipment, Kris Realander, sales manager at Morrisville, N.C.-based Bobcat dealership Triangle Equipment Group, told EFN. The dealer has been seeing strong demand for mini excavators and mini track loaders in recent months, he said.  

“What we have here are extremely tight, zero-lot lines,” he said, referring to development that is directly on or adjacent to property boundaries. “They’re putting houses right next to each other. So, you can’t get a 68-inch-wide unit back there, or 74. There’s places where it’s not doable.” 

The city of Raleigh, near Triangle Equipment Group’s Morrisville location, amended its zoning code in 2021 to permit construction of duplexes with the same standards as single-family homes in all but one district, allowing for increased density, according to the municipality’s website. 

Not only are compact machines better suited for residential jobs, but they are easier to move around, Realander said.  

“You can still tow [the equipment] around with a half-ton truck,” he said. 

Landmark Equipment’s Isgrig agreed. 

“These guys use a lot of compact machines nowadays. It’s just cheaper to move. … Your residential or small spaces in the city, you’re moving stuff around, and it’s easier to get them in and out.” 

— Matthew Isgrig, Landmark Equipment

Plus, compact equipment is necessary for many jobs because they often have rubber tracks, which do not damage concrete like the steel tracks on most large units, Isgrig said. 

OEMs take action 

Multiple OEMs have introduced new compact equipment models in recent years to address the need for downsized equipment.  

For example, CNH Industrial subsidiary Case Construction Equipment launched two new compact wheel loaders earlier this year in response to market shifts, according to an April 22 CNH release. 

“Jobsites for construction, utilities and municipal crews are becoming more varied with more complicated requirements, whether it’s tight operating spaces, exacting project specifications or stringent regulations,” Terry Dolan, head of CNH Construction North America, stated in the release.  

Case also launched four mini excavator models this year amid “stringent jobsite requirements,” Dolan stated in a June 24 release. 

“These new models deliver big on power, but they’re also easier to transport, move around the jobsite, operate, maintain and own compared to larger machines.”

— Terry Dolan, CNH Construction North America

Financing incentives 

Aggressive OEM incentives coupled with appealing price points are adding to the market’s momentum.  

Case is offering 0% financing for up to 60 months for new compact track loaders, up to 48 months for new mini excavators and mini track loaders and up to 36 months for small articulated loaders, according to its online offers and promotions.  

In addition, Japanese OEM Yanmar completed its full line of compact equipment in 2025 with the introduction of its compact track loader, which joined its mini excavators, compact wheel loaders and tracked carriers. 

Yanmar is offering 0% for up to 60 months for these models, with cash back ranging from up to $6,000 to $15,000. These offers end Sept. 30. 

Industry giant Caterpillar has similar programs, including 0% APR up to 60 months for mini excavators and compact track loaders, along with 36-month deals for compact wheel loaders, small dozers and telehandlers, according to Aurora, Colo.-based dealership Wagner Equipment Co.  

Non-captive lenders are offering competitive rates to capitalize on new compact equipment sales, as well, Realander said. 

“I have lending options on that to where lenders will take certain risk, and the risk will require, let’s say, 20% down,” he said. “Now we’ve got a nice little program to where we can disperse that over the first seven months, then we can drop the payment considerably.” 

Rentals ‘trending toward miniaturization’ 

Rental penetration for U.S. construction and industrial equipment hit a record 57% in the first quarter, according to equipment market research firm EquipmentWatch. 

Many dealers are moving compact equipment into their rental fleets to meet growing demand, Sandhills Global’s Ryan said, attributing the recent YoY declines in used mini excavator inventory to this trend.  

“I think that’s where a lot of that [compact equipment] inventory really is,” he said. “It’s a little skewed as far as what’s out there on retail inventory because it’s just kind of shifting into the rental inventory more than anything else.” 

More lenders are trying to break into the rental market by offering special floorplan financing deals or through rental-to-sale conversions, Ryan said.  

Equipment rental houses are also observing “some macrolevel trends toward miniaturization,” Josh Nickell, chief executive of Atlanta-based Northside Tool Rental, previously told EFN. 

Atlanta passed several zoning ordinances in 2018 and 2019 that permitted increased construction of accessory dwelling units — a detached residence on the same lot as a primary single-family home — as well as zero-lot-line developments, according to the city. 

“I think you see more things like micro scissor lifts, mini skid steers,” Nickell said. “Those things have continued to be more and more popular.” 

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