New Family Home Size Stabilize in Q4 2020 as Pandemic Shifts Consumer Preferences

According to Q4 2020 data from the U.S. Census Bureau’s Quarterly Starts and Completion by Purpose and Design and analysis provide by the National Association of Home Builders (NAHB), new home sizes did level off in 2020 after years of decline. This was driven by the impact of the COVID-19 pandemic and home buyers’ need for additional space as people use their homes for more purposes. Since Great Recession lows (and on a one-year moving average basis), the average size of new single-family homes is now only 4.5% higher at 2,477 square feet, while the median size is about 8% higher at 2,273 square feet. The NAHB analysis concludes that home size increased from 2009 to 2015 as entry-level new construction was constrained. However, home size has declined since 2016 as more starter homes were developed. Going forward we expect home size to increase once again, given a shift in consumer preferences for more space due to the increased use and roles of homes (for work, for study) in the post-Covid-19 environment.