Size of new homes decreases as budget concerns offset pandemic-related demand for more space

By Robert Dietz
NAHB – Eye on Housing
August 19, 2022
Category: Finance & Economics
Region: United States

An expected impact of the virus crisis is a need for more residential space, as people use homes for more purposes including work. During the housing boom of recent quarters, this led to a rise for new single-family home size. However, as the housing market weakens this trend appears to be reversing. According to second quarter 2022 data from the Census Quarterly Starts and NAHB analysis, median single-family square floor area inched down to 2,302 square feet. Average (mean) square footage for new single-family homes decreased to 2,498. Since Great Recession lows, the average size of new single-family homes is now 5.9% higher, while the median size is 10.3% higher. …Going forward we expect consumer preferences for more space due to the increased use and roles of homes (for work among other purposes) will increase the demand for space, while tighter budgets due to elevated interest rates will reduce demand.

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