Expect New Homes to Keep Getting Bigger [2,541 sq ft / 236 sq m]

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Expect New Homes to Keep Getting Bigger - Banker & Tradesman

Square footage always increases in slow markets when the only people buying new houses are middle- and upper-income earners. But when the market speeds up, builders try to go smaller in an attempt to capture a larger share of sales.

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Square footage always increases in slow markets when the only people buying new houses are middle- and upper-income earners. But when the market speeds up, builders try to go smaller in an attempt to capture a larger share of sales.

This year, though, the story’s a little different. With the new home market booming, the trend is toward larger houses, not smaller, largely because people are using their homes for more purposes – work, for example – and need more space.

Census Bureau data shows that in the third quarter, the average size of a new single-family house rose to 2,541 square feet. That means the average size of a new house is now 6.2 percent larger than it was when the Great Recession ended. And going forward, economist Robert Dietz at the National Association of Home Builders expects the current trend to continue.

For what it’s worth, the size of a typical house rose from 2009 to 2015 as entry-level new construction was constrained. But it declined between 2016 and 2020 as more starter homes were developed.