Bigger isn’t always better. In fact, when it comes to the average and median size of new homes, a smaller size could mean a larger number of sales.
The reason is simple: Following the recession, buyers of large, higher-end homes made up a greater proportion of the housing market. But in recent years, demand for smaller, entry-level homes has increased as the economy strengthens.
Between 2009 and 2015, the median square footage of a new single-family home grew from 2,135 to 2,467. But over the last two years, it’s gradually decreased to 2,388 square feet.
NAHB Chief Economist Robert Dietz noted in a recent Eye on Housing post that this rise and fall in home size is consistent with historical patterns in the wake of a recession.
“The recent declines in size indicate that this part of the cycle has ended, and size will trend lower as builders add more entry-level homes into inventory,” Dietz wrote.
Read the full blog post here.