Typical home size is shrinking
New single-family homes are slightly smaller than a year ago based on third-quarter comparisons by the National Association of Home Builders. The change marks a reversal of a trend during the recovery as builders focused on the higher end of the market.
NAHB analyzes both median and average square footage using data from the Census Quarterly Starts and Completions by Purpose and Design. The association found median single-family square floor area was 2,378 (down from 2,391) while the average was 2,581 (down from 2,593).
Using a one-year moving average (a less volatile metric) the analysis shows since cycle lows the average size of new single-family homes is actually 10 percent higher (2,620 square feet), while the median is 14 percent higher, at 2,399 square feet.
Unlike single-family patterns, new multifamily apartment size is down compared to pre-recession periods. NAHB attributes the drop to a weak for-sale multifamily market and strength for rental demand.
In comments accompanying its report, NAHB noted the post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. "Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers who face fewer credit constraints return to the housing market in relatively greater proportions."