U.S. Home Construction Is Up, But Buyers Don’t Want Bigger Houses

The average home size in the U.S. has grown over the last 50 to 100 years. According to data from 2016, new homes in the U.S. now are 1,000 square feet bigger than those built in 1973, with nearly double the amount of living space per person.

Compared to those homes built over a century ago, today’s newest domiciles offer 211% more living space. Considering that the average U.S. household contains some 300,000 things, it’s no surprise that Americans feel like they need more room.

In 2016, the U.S. construction market was worth around $1,162 billion. In 2018, housing construction in the U.S. seems to be faring even better, with the number of new housing units under construction enjoying an increase of 9.7% in just one month.

According to the U.S. Commerce Department, this marks the third increase in only a four-month period. But while the number of new homes throughout the nation is on the rise, homebuyer tastes seem to be changing: now, buyers are embracing the idea of a small — but not tiny — home to call their own.

But that trend could be coming to an end. While tiny houses are still very much an acquired taste, accounting for less than 1% of new builds in the U.S., smaller-than-average homes are becoming more popular.

The average size of newly built homes in the U.S. was 2,571 square feet in 2017, according to the National Association of Home Builders. But the homes that actually get the most views on Realtor.com are houses between 1,000 and 2,000 square feet.

Around 32% of people looking to purchase a new home are first-time buyers, and these smaller properties are particularly appealing to millennials looking for more affordable options. Baby Boomers are interested in smaller properties too, since downsizing to a smaller home can allow them to age in place.

This national trend is is starting to catch on in local markets, including New Orleans and Sacramento, where starter homes could provide a welcome solution to housing shortages.

In many areas, a large home is still very much part of the American dream. But with property prices and the cost of living on the upswing, affordable options are needed now more than ever. In fact, national home prices increased by 6.6% throughout January 2018.

Many Americans are realizing that there’s nothing wrong with a starter home — especially when they have to make a choice between homeownership or continuing to rent an apartment. The problem, in many cases, is finding affordable starter homes.

If builders want to appeal to local markets, the answer might lie in developing smaller, cheaper homes that can encourage homeownership even in young people.

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