Key Takeaways:

  • Average home size rose from 2,250 square feet in 1999 to 2,704 in 2015;
  • Recent years of reductions have brought the average down to 2,540 feet;
  • Average multifamily home sizes are the lowest since 1999, when they were first measured, due to a sharp drop in condo construction.

By Manuel Gutierrez, Consulting Economist to NKBA

 

Is bigger back to being better?

It may be too soon to tell, but the latest data on the growing size of new single-family houses is good news for suppliers. After five years of continuous reductions in the average size of new homes, houses built in the second quarter were 83 square feet larger than in the same quarter last year.

The typical single-family house averages 2,540 square feet, up from 2,457 square feet last year. It’s too early to label this reversal as a trend, though. Additional gains will be needed before determining there is a return to the earlier, much longer pattern of ever-increasing home sizes.

The average size of new homes in Q2 2021 increased for the first time in six years.

Figure 1 shows home sizes rising from 2,250 square feet in 1999, to 2,704 square feet by 2015. This equates to an annual gain in size of over 28 feet during that 16-year period. The average house in 2015 was 454 square feet larger than one built 16 years earlier.

The bottom panel of Figure 1 shows annual changes in house size. Prior to 2016, they increased nearly every year of this century, with few exceptions. The largest drop occurred in 2009, at the height of the economic recession.

In five of the past six years, however, there has been a reduction in home sizes. Although not shown on the charts, median house sizes follow a similar pattern. In the second quarter, the median single-family home was 2,297 square feet, or 243 smaller than the average.

The story for multifamily houses is quite different. The average size of a housing unit in multifamily buildings did not increase in the second quarter. In fact, it fell by 70 square feet, to 1,045.

Also, in contrast to single-family houses, current multifamily house size is the lowest recorded since 1999, the year this data was first tracked.

The size of multifamily housing units peaked in 2007, at a high of 1,313 square feet. Today, the typical unit is a significant 268 square feet smaller.

The primary reason houses were bigger between 2004 and 2007, highlighted in gray in Figure 2, is that nearly half the multifamily units built in those years were sold as condominiums. Condos are typically larger than apartments designed as rental units.

During that period, between 40% and 50% of all multifamily units were built as condos. Today, it has dropped to a mere 5%.

Charts: