Square Footage of New Single-Family Homes Continues to Shrink

Data from the US Census Bureau’s 2022Q4 Quarterly Starts and Completions by Purpose and Design report, with additional analysis provided by the National Association of Home Builders, reveals that the median single-family square floor area declined significantly to 2,203 square feet—the lowest level since 2011. The NAHB says the average (mean) square footage for new single-family homes fell to 2,472 square feet.

Since the Great Recession lows (and on a one-year moving average basis), the average size of a new single-family homes is now 4.7% higher, while the median size is 8.2% higher. However, the NAHB believes that both measures will weaken in the coming months.

The NAHB points out that home size increased from 2009 to 2015, as entry-level new home construction was constrained. Home sizes declined between 2016 and 2020 as more starter homes were developed. Going forward, the NAHB anticipates that home size will face opposing determinants. A shift in consumer preferences for more space due to the increased use and roles of homes (for work among other purposes) will increase demand for space. On the other hand, tighter budgets due to elevated interest rates will reduce demand. The tighter budget factor, the NAHB believes, is likely to dominate in the coming quarters.