Single-Family Homes are the Smallest They’ve Been in a Decade

Houses are getting smaller. Median single-family home size has dropped to 2,191 square feet, the lowest since the end of 2010, according to Census Bureau data analyzed by the National Association of Home Builders. Average or mean square footage for new single-family homes fell to 2,415 square feet.

Just two years ago in 2021, there was a brief uptick in home size due to several factors. As homeowners fled cities and dense urban cores, they sought larger spaces to hunker down. Many looked for houses with extra rooms and spaces that might work for home offices, gyms and classrooms. Many could purchase bigger homes, too, as mortgage rates hit historic lows; traveling had stopped as well, which freed up discretionary dollars for money to be spent on their housing and furnishings and remodeling work.

But that was just a blip in a longer trend in which home sizes declined between 2016 and 2020 as more starter homes were developed, according to NAHB Chief Economist Robert Dietz.

He expects square footage to continue its decline as housing affordability remains constrained with higher interest rates, the difficulty many buyers face in putting down a down payment and affording a monthly mortgage with higher home prices. For the fifth consecutive month in June, home prices rose 0.9%, according to the seasonally unadjusted S&P CoreLogic Case-Shiller U.S. National Home Price Index, which measures average home prices nationwide, according to RealPage. 

Which rooms or areas are disappearing to achieve smaller homes now? According to an article in the Wall Street Journal, most builders and architects follow a similar recipe of removing dining areas, bathtubs and separate living rooms. Secondary bedrooms and loft spaces are also on the wane and sometimes disappearing. 

Though now it was the fifth consecutive month of price increases, the annual rate of change has decreased over the last 14 months since they hit a peak of 20.8% in April 2022. Home prices were unchanged year-over-year in June of this year, which reflected improvement from the 0.4% annual dip in June. The S&P CoreLogic Case Shiller 20-City Composite Index, posted a 0.9% month-over-month gain, with prices down 1.2% on a YoY basis. In June all 20 cities in the index reported MoM price increases for the fourth consecutive month. Cleveland had the largest monthly increase at 1.5%, followed by Chicago and Miami, which each had 1.4% increases. But 10 of the 20 metro areas also recorded lower prices with the biggest in the West markets of San Francisco at minus -9.7%, Seattle at minus -88%, Las Vegas at minus -8.2% and Phoenix at minus -7.5%.