New homes in the US are shrinking
‘Affordability crisis’ drives builders to cut down on costs
LAS VEGAS — Builders are putting the squeeze on new homes to lower costs.
The average new home size across the country is declining in response to higher house price tags and more buyers wanting to downsize.
But the typical new home still has plenty of room at about 2,500 square feet last year.
“It peaked at 2,689 square feet in the 2016,” said Rose Quint, a top researcher with the National Association of Home Builders. “In the last four years we have seen the average size of new homes decline every year.”
Homes being built in the U.S. are about the same size as what builders were providing before the Great Recession. But the price tags are much higher.
In 2005 the median price of new houses in Dallas-Fort Worth was about $176,000. Now a mid-priced single-family home in the area costs around $350,000.
With similar price increases in most states, builders are worried they are pricing buyers out of many markets.
So builders are trimming sizes and reducing frills to rein in costs.
One way for builders hold down costs is to downsize the number of bedrooms. Less than 45% of homes built nationally in 2019 had four or more bedrooms, according to the National Association of Home Builders’ latest studies. Big garages are also starting to shrink in number of stalls and overall size.
“Builders are shifting more and more toward the entry-level homes in what they produce,” Quint said. “They are trying to respond to the affordability crisis we have had in the country in the last few years.”