New Homes Are Getting Larger to Accommodate the New Normal

It’s clear that the pandemic drove a change in how people used their houses, with more people using their houses as their offices, home gyms, and more. That shift led a number of people to look for larger houses to accommodate their new normal. And as a result, newly built homes are increasing in size to address that demand.

According to new analysis from the National Association of Home Builders, the average size of a newly built single-family home during the third quarter was 2,541 square feet. That marks the third straight quarter that the average size of a new single-family home has increased.

It’s also a significant reversal from the trend of the last few years. According to NAHB analysis, the average size of new homes decreased from 2016 through 2020 as more starter homes were being built.

However, that trend appears to have been ended by the pandemic as homebuilders are building larger houses to meet the demand from buyers.

According to NAHB analysis, since the lows of the late 2000’s, the average size of new single-family homes is now 6.2% higher, while the median size is 9.3% higher.

“Home size rose from 2009 to 2015 as entry-level new construction was constrained,” NAHB Chief Economist Robert Dietz wrote in the report.

“Home size declined between 2016 and 2020 as more starter homes were developed,” Dietz added. “Going forward we expect home size to increase again, given a shift in consumer preferences for more space due to the increased use and roles of homes (for work, for study) in the post-Covid-19 environment.”