Residential Space Trends Shift Amid Housing Affordability Concerns
NAHB Analysis Reveals Changing Home Size Dynamics as Housing Affordability Challenges Persist
The dynamics of residential space are undergoing a transformation as the aftermath of the virus crisis prompts changes in housing needs. The National Association of Home Builders (NAHB) has conducted an analysis revealing that the demand for larger homes is shifting due to the evolving landscape of housing affordability.
In 2021, the pandemic-induced crisis prompted a surge in the demand for more residential space, with homes serving multiple purposes, including workspaces. This led to an increase in home size as interest rates reached historic lows. However, as interest rates climbed in 2022, housing affordability became a pressing issue, causing a noticeable trend towards smaller homes.
The latest data from the Census Quarterly Starts and Completions by Purpose and Design, analyzed by NAHB, underscores this trend. The median square footage for new single-family homes in the second quarter of 2023 dipped to 2,191 square feet, marking the lowest reading since the close of 2010. Moreover, the average square footage for these homes slid to 2,415 square feet.
While compared to the lows observed during the Great Recession, the average size of new single-family homes has grown by 3% to 2,465 square feet, the median size has witnessed a 6% increase to 2,234 square feet.
NAHB's analysis traces the trajectory of home size dynamics over the past years. The period from 2009 to 2015 saw an upsurge in home size as entry-level construction lost market share. Between 2016 and 2020, the trend reversed as more starter homes entered the market. Following a brief post-COVID building boom, the analysis points to a decline in home size, a trend that is likely to continue given the prevailing constraints on housing affordability.
https://eyeonhousing.org/2023/08/single-family-home-size-moves-lower-to-more-than-a-decade-low/?_ga=2.147405235.567618713.1693256681-1589587238.1687366601
