American Homes Are Getting Smaller While Families Are Getting Bigger

After decades of growth, U.S. home sizes are shrinking, though the new trend hasn’t done much to make them more affordable.

After the mid-aughts hubbub over tiny homes, today’s homebuilders are still thinking "small." As reported by The Wall Street Journal’s Maggie Eastland, new single-family home sizes have decreased by 10 percent since 2018. Building smaller is becoming a means for developers to expand their potential customer base as housing and labor costs continue to rise.

"[Builders and architects] are axing dining areas, bathtubs and separate living rooms. Secondary bedrooms and loft spaces are shrinking and sometimes disappearing," writes Eastland. These rooms are being replaced with multi-use and shared spaces.

The trend marks a reversal of historic growth in home sizes: According to RocketMortgage, the average home size in 1973 was 1,660 square feet, which ballooned throughout the ’90s to 1,890 square feet and continued to rise until 2015, when it peaked at 2,687 square feet. By 2021, that number dropped to 2,273. The average size of a home built in 2022 was 2,299 square feet, according to the Census Bureau. 

In September last year, The New York Times lamented the end of the "starter home", writing that "putting—or keeping—a low-cost home on increasingly pricey land" doesn’t make financial sense. That story also contrasts exploding home sizes throughout the 20th century with shrinking households: American homes held an average of 4.6 individuals in 1900, compared to only 2.58 by 2010, according to a 2020 Census report. Smaller homes meet the needs of smaller families. However, that same Census report shows an unusual reversal: By 2017, the number of people per household increased to 2.65, however, the number of unrelated occupants and "other family" cohabitating has increased. 

The Journal story remarks that these new, smaller single-family houses are attractive for first-time homebuyers and empty-nesters looking to downsize, however, they might not be able to accommodate the needs of multi-generational or nonnuclear families. And, as the Journal notes, they won’t have a big enough effect on affordability to changing the national housing landscape—Estridge, an Indiana-based builder, still prices its new, smaller homes between $400,000 and $800,000. 

Top Image: Ben Hasty/MediaNews Group/Reading Eagle/Getty

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