Movies from the early ’90s would have you believe that the average American family lives in a mansion — maybe like the house from “Home Alone,” which reportedly went on the market last year for $5.25 million.
But these days, the American dream home is looking a little smaller. In fact, the typical size of a newly constructed single-family home has been trending down over most of the last decade, according to a National Association of Realtors (NAR) study of census data.
Why are new homes getting smaller?
According to the NAR study, the median size of a new home under construction fell from 2,466 square feet in 2015 to 2,177 square feet in 2023 — a difference of 289 square feet, about the size of a large master bedroom.
Further, a separate National Association of Home Builders study found that in 2023, nearly half of buyers (47%) said they desired a home with less than 2,000 square feet.
The reasons why have to do with population trends and economics.
For one thing, the numbers of single home buyers and buyers without children are on the rise, NAR deputy chief economist Jessica Lautz said in a Washington Post report.
These include more “retirees who are empty nesters, or people who don’t have children yet or don’t plan on having children,” she said.
Meanwhile, the steep cost of newly constructed homes may be funneling new buyers to smaller houses. A separate NAR report found the first-time buyers’ share of the market was at an all-time low, while the average homebuyer’s age was at an all-time high.
Keeping homeownership affordable — no matter how big or small
Although it may be a bit of a surprise to learn that the average newly constructed single-family home is getting smaller, it’s not entirely out of left field.
While not as trendy as they were a few years ago, tiny homes — and those who admire them — make clear that there’s an appetite for smaller living spaces and smaller bills to support them. (That said, it can sometimes be difficult to get traditional homeowners insurance for your tiny house.)
If you’re having trouble affording the size of home you need, you can at least try to save by carefully shopping for your mortgage. The right loan can make the difference between an affordable home purchase and an unbearable debt trap.
You can also try to save on homeowner’s insurance. Comparing homeowners insurance quotes is key, and it’s also easy to switch home insurance policies if you find a better deal later.
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This post was previously published on VALUEPENGUIN.COM.
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