New US Single-Family Home Sizes Are Starting to Shrink

A closer look at the US Census Bureau’s Quarterly Starts and Completion by Purpose and Design for 2023Q1 2023, with additional analysis provided by the National Association of Home Builders (NAHB), reveals that as interest rates increased in 2022 and 2023 and housing affordability deteriorated, the demand for home size has trended lower.

As a result, in Q1, the median single-family square floor area registered at 2,261 square feet. Average (mean) square footage for new single-family homes stood at 2,469 square feet.

The NAHB notes that since the Great Recession lows (and on a one-year moving average basis), the average size of a new single-family home is now 4% higher at 2,486 square feet, while the median size is 7% higher at 2,262 square feet.

Home size increased from 2009–15 as entry-level new construction lost market share, then declined between 2016–20 as more starter homes were developed. After a brief increase during the post COVID-19 building boom, home size is trending lower and will likely do so as housing affordability remains constrained, the NAHB said.