The National Association of Home Builders (NAHB) reports that the size of single-family homes during Q2 2019 declined. [1]
The NAHB, with data from the Census Bureau’s Quarterly Starts and Completions, reported that single-family square-footage fell to 2,245-square-feet.
Single-family home sizes have been on the decline since 2015 when they averaged around 2,700-square-feet. Home sizes shrunk to nearly 2,100-square-feet a decade during the housing crisis.
The NAHB states that the post-recession pattern of the increasing size of single-family homes is consistent with historical data following a recession.
“Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions,” the report states.
The pattern, according to the NAHB, was “exacerbated” recently due to market weakness among first-time buyers and supply constraints in the building market.
Additionally, home sizes will continue to trend lower as builders focus more on entry-level homes as the custom market levels off.
That reported lack of inventory, especially in entry-level homes, is causing first-time buyers to wait longer than expected. A report by realtor.com revealed that of the expected home buyers this spring, 42% were shopping for a home for the first time, and the search for their first home took longer than ever.
The report states that a quarter of the first-time buyers searched for a home for more than a year and compared to 11% two years ago. Also, a third of first-time buyers were in the market for more than six months, compared to 18% two years ago.
"First-time buyers are usually younger and are motivated by getting married or starting a family," said Danielle Hale, realtor.com's Chief Economist. "They're looking for the type of home where they can have it all: space, affordability, and a good school system."
Realtor.com added that 45% of new buyers are searching for homes in small towns and rural areas, 34% are in suburbs, and 16% plan to stay in the city.