Bathrooms in New Single Family Homes
Last week we brought you the latest data on the size of new homes built in the U.S. last year. We learned that, unlike most recent history, the typical single family house built in 2016 was about 2% smaller than those built in the prior year. The average home was 2640 square feet in 2016, down from an average of 2687 in 2015.
This week we want to look into another aspect of new homes built last year- that is the number of bathrooms. Since bigger houses generally have more bathrooms, we should expect that last year’s drop in house size would result in a decline in the number of bathrooms. In fact, such is the case as we show below.
The house size decline was impacted homes with “3 or More” bathrooms. These homes accounted for 37% of all single family homes built in 2016, down from 38% in the prior year. At the other extreme qw dins that houses with “1.5 or Fewer” bathrooms also declined; in this case by to 3%, down from 4% in 2015.
These losses were made up by nearly two percentage points increase in homes with two bathrooms. The share of these homes rose to 31% in 2016, up from 29% the prior year.
Overall, the average number of bathrooms in new single family homes built last year is 2.8, including both full and half baths. In fact, 45% of the homes had between 2.5 and 3.0 bathrooms. A further 28% had 2 bathrooms meaning that that typical home has between two and three bathrooms. Just over one in ten (11%) of the homes have four bathrooms or more.
Despite the preponderance of news in the press of homes with a multiplicity of bathrooms, the vast majority of them have between two and three bathrooms. In fact, these homes represent nearly three-quarters of those built last year (73% actually).
Of course, as indicated above, larger homes have more bathrooms; this is not a great insight. However, to arrive at a factual confirmation of this insight, one needs to conduct several calculations using the Department of Commerce data.
The chart below displays the average number of bathrooms for several house size ranges. We can see the obvious point that the number of bathrooms rises along with the size of the house. The increase in the number of bathrooms is nearly proportional to the size of the house. Going from a 2000 sq. ft. house to a 3000 sq. ft. one, a 50% increase in size, increases the number of bathrooms from two to roughly three- also a 50% increase.
As is well-known, half-baths are fairly common in U.S. homes. We find that over 50% of the houses built last year had at least one half-bath, although overall only two percent of the homes had two half-baths. The greater the number of full-baths a house may have, the more likely it is to have more half-baths. The chart below shows that while 38% of the homes with one full bathroom also have a half-bath, 61% of homes with four or more bathrooms have at least one half-bath. Also, not shown on the chart, is the finding that homes with four or more full bathrooms have on average two half-baths.
All of this information is good news for the industry. American households still want between two and three bathrooms in their homes, despite the shrinking average household size. More bathrooms in new homes imply more remodeling prospects in the future.
Note
: These data are taken from an annual survey conducted by the US Department of Commerce among a large sample of newly-built housing units, both single and multifamily homes. The raw data from the survey can be found here: https://www.census.gov/construction/chars/
Manuel Gutierrez, Consulting Economist to NKBA
Explanation of NKBA’s Economic Indicators Dashboard
The dashboard displays the latest value of each economic indicator with a colored triangle that highlights visually the recent trend for each of the drivers. “Green” is a positive signal indicating that the latest value is improving; “Yellow,” as it’s common understood denotes caution because the variable maybe changing direction; and “Red” indicates that the variable in question is declining, both in its current value and in relation to the recent past.
Note that all the data, except for “mortgage rate” and “appliance store sales” are seasonally adjusted and are represented at annual rates.
Remodeling Expenditures. This is the amount of money spent on home improvement projects during the month in question. It covers all work done for privately-owned homes (excludes rentals, etc.). The data are in billions of dollars and are issued monthly by the U.S. Department of Commerce.
Single Family Starts. It is the number of single family houses for which construction was started in the given month. The data are in thousands of houses and are issued monthly by the U.S. Department of Commerce.
Existing Home Sales. These data are issued monthly by the National Association of Realtors, and capture the number of existing homes that were sold in the previous month.
High-End Home Sales. This series are sales of new homes priced at $750,000 and over. The data are released quarterly by the U.S. Department of Commerce, and are not seasonally adjusted. Thus a valid comparison is made to the same quarter of prior year.
Mortgage Rate. We have chosen the rate on 30-year conventional loans that is issued by the Federal Home Loan Mortgage Corporation (known popularly as Freddie Mac.) Although there are a large number of mortgage instruments available to consumers, this one is still the most commonly used.
Employees in Residential Remodeling. This indicator denotes the number of individuals employed in construction firms that do mostly residential remodeling work.
Building Materials Sales. These data, released monthly by the Department of Commerce, capture the total sales of building materials, regardless of whether consumers or contractors purchased them. However, we should caution that the data also includes sales to projects other than residential houses.
Appliance Store Sales. This driver captures the monthly sales of stores that sell mostly household appliances; the data are stated at an annual rate. We should not confuse this driver with total appliance sales, since they are sold by other types of stores such as Home Centers, for instance.
We hope that you find this dashboard useful as a general guide to the state of our industry. Please contact us if you would like to see further detail.
