It’s no mystery that newly built single-family homes are pretty big nowadays, but the latest data still surprises.
The last couple of years, we’ve been steadily tracking the return of large new construction homes, but even we were surprised by the following statistic: the average size of newly built single-family homes in 2013 was nearly 2,600 square feet.
That’s up from 2,330 in 2003, and according to an analysis by CNN Money, the average new home size has risen an astounding 50.6 percent in the last 30 years.
Such stats lead to an inevitable question – what on earth is going on?!
The Causes of Today’s Super-Sized Homes
Exaggerated home sizes were a key trait of the housing bubble years, but irrational exuberance is not behind 2013’s record-setting home sizes; the reasons are more fundamental in nature:
- Firstly, gargantuan new homes are making up a larger piece of the pie, while more modest homes are fading away; in 2013, homes of 4,000 or more square feet made up 9 percent of new construction (compared to 6.6 percent in 2005), while homes of 1,400 square feet or less made up just 4 percent (which, remarkably, is less than half of 2005’s 9 percent market share).
- So, super-sized homes now have the exact same market share as modest homes did just eight years ago; also, homes sized 3,000 to 4,000 square feet have seen their market share rise from 15.6 percent in 2005 to 21.7 percent in 2013.
- The reasoning behind that shift is simple – the vast majority of consumers looking for newly built single-family homes are wealthier consumers, and homebuilders are responding in kind with larger, more expensive homes.
- As Stephen Melman, the director of Economic Services for the National Association of Home Builders, phrased it to CNN Money, “If you had a lot of money in the stock market, it has doubled since 2009.”
- Compare that with younger homebuyers, who are still dealing with a lousy job market and student debt, and the new home market has become increasingly specialized.
And of course, square footage is not the only thing that’s increased: according to the Wall Street Journal, the share of new homes with four-plus bedrooms rose to 44 percent (from 35 percent in 2000), while 33 percent had three or more bathrooms (up from 20 percent).