As April marks New Homes Month, the housing industry experiences an increasingly trend towards smaller dwellings that reflect buyer tastes and make homeownership more accessible for families looking to buy this year. According to an analysis conducted by the National Association of Home Builders (NAHB), newly built homes reached their smallest median size since 2013 in 2024.
Carl Harris, NAHB Chairman and custom home builder from Wichita, Kansas emphasized the significance of homeownership for families looking to establish roots. Our nation’s builders are meeting this demand by finding solutions in home construction that enable more individuals to afford purchasing a home.”
NAHB reports that more than one third (38%) of builders reduced home sizes last year and 26 percent plan further decreases this year. NAHB’s What Home Buyers Really Want study shows the dramatic change in buyer preferences over two decades: in 2003 the typical buyer desired 2,260 square feet; today this figure stands at 2,067.
Data from the U.S. Census Bureau demonstrate a steady decline in new home construction, dating back nearly 10 years. By 2023, median size had dropped to 2,179 square feet – its lowest point since 2010. This downward trajectory started around 2015 but temporarily reversed itself during 2021 due to pandemic-driven demands for extra space and favorable interest rates.
Over one third of builders lowered home prices in 2023. NAHB anticipates builders offering smaller and more cost-effective designs to address affordability challenges; however, they continue to face supply-side barriers that increase construction costs, such as scarce buildable lots, limited skilled labor availability and stringent regulations. The median new home price in 2023 stood at $428,200 – representing a decrease from $2022 by over six percent.
“Increasing housing supply is key to addressing affordability. The residential construction industry is committed to keeping costs at the forefront of national conversations and is working across government levels and political divides so more Americans can pursue homeownership dreams.”
NAHB members nationwide will engage in discussions with their representatives regarding housing priorities and affordability solutions during NAHB’s Legislative Conference, to be held June 12 in Washington D.C.