After years of saving, Jordyn Carias and her partner purchased a home for the first time last month. To find a place that didn’t break the bank, she said, they had to go smaller. “We had a lot of things we wanted in our first home, but after looking at the price range, we had to reassess,” Carias, a graphic designer who lives in Muscatine, Iowa, said.
Compared to other countries, America is known for bigger cars, portions and take-out coffee cup sizes. For most of recent history, Americans have also wanted bigger homes — but now that’s changing. For most of the last half-century, new single-family homes kept growing.
In 1973, the median size of completed single-family homes was 1,525 square feet, according to US Census data. By 2015, that number had ballooned to 2,467 square feet. But as the cost of buying a home has exploded and McMansions have fallen out of favor, homebuilders have reversed course, building smaller homes with an eye to first-time buyers.
In 2023, the median single-family home built was 2,233 square feet, down 9% from the 2015 peak, with many formal dining rooms and “bonus” rooms disappearing. Carias and her partner ultimately settled on a roughly 920-square-foot home. To maximize space, they decided to use the basement as their primary bedroom.
“The broader trend in larger homes had been driven by what consumers wanted and demanded,” said Alan Ratner, a homebuilder analyst at Zelman & Associates. “More recently, we’ve started to see that flip almost out of necessity, because of how challenging affordability is right now.” Homebuyers are warming up to the idea of smaller dwellings: According to an April study from the National Association of Homebuilders, the typical buyer wants a home that is 2,067 square feet — still smaller than the typical new home size last year.
This is a new housing development in Middlesex Township, Pa., on Oct 12, 2022. (AP Photo/Gene J.
Puskar) Carias’ new home was built nearly 100 years ago. Today, smaller, often more affordable homes under 1,000 square feet are harder to come by in most suburbs. That wasn’t always the case.
For a period beginning in the late-1940s, “Levittown” homes came to define suburban living in post-war America, Jacob Anbinder, a historian at Cornell University, said. The housing developments, which began in the New York suburbs but spread elsewhere in the US and Puerto Rico, often fit eight 750- to 800-square foot homes on one acre. “As many Americans became wealthier over the ’40s, ‘50s and ‘60s, they wanted higher living standards and the larger homes that came with them,” Anbinder said.
“There was almost continuous upward growth in the size of new homes.” Today, most of the original Levittown homes no longer exist, according to Anbinder. Over the years, homeowners expanded or demolished them in favor of larger spaces.
That upward growth trend has largely tapered in recent years, though. According to an NAHB survey, 17% of homebuilders said they built homes on smaller lots in 2023 to support home sales, and 14% said they built more townhouses. Earlier this year, D.
R. Horton, America’s largest homebuilder, said it planned to reduce the size of its homes “to address affordability for homebuyers.” In a July earnings call, the company’s chief operating officer, Michael Murray, said D.
R. Horton’s average house size was down 2% compared to last year. There are signs those efforts might be helping buyers get in the door: The median sales price of existing homes jumped to $426,900 in June, according to the National Association of Realtors, while the median price of new homes in June was $417,300, according to the US Census Bureau.
New homes in development in Eagleville, Pa., Friday, April 28, 2023. (AP Photo/Matt Rourke) Heather Eisenmann, a Realtor who specializes in selling new construction in Clarksville, Tennessee, said that she’s noticed that many of the new homes she shows now have smaller bedrooms and living rooms.
Many no longer have freestanding tubs to save on bathroom space, and formal dining rooms are often swapped out for kitchen islands built for bar seating, she said. “Three years ago, we were building in a subdivision called Easthaven. Those homes were 2,500 to 3,200 square feet,” she said.
“Everything I put on today is under 2,000.” Eisenmann said she’s also recently noticed that some homebuilders are skipping expensive appliances and “extras” like fences and window treatments to lower a home’s list price, a strategy she thinks could backfire and repel first-time buyers. “New construction is appealing to a first-time homebuyer because it requires little to no maintenance,” she said.
“But when they start looking at new homes that don’t come with all the appliances, most of my first-time homebuyers want to turn to existing homes.” Carias, from Muscatine, said she’s happy with her new under-1,000-square-foot home and doesn’t have plans to move anytime soon. She and her boyfriend relocated from the Sacramento area back to her hometown to find a home within their price range.
“Our biggest goal was getting to carve out a tiny little slice of something that is ours and not throw away our money on renting anymore,” she said. “I am so excited to paint and do whatever I want.” Bringing in a contractor to carry out work at your home or business may seem like a smart move, but it has some subtle downsides.
Contractors can appear to be trustworthy; however, sometimes you can feel ripped off by the time they’re finished with their work. Regardless of how many references they’ve received, here are four scams you should avoid when hiring a contractor. One of the indicators you’ve been scammed by a contractor is when they use cheaper materials without telling you before they start.
You’ll often agree to a price before they start the work; however, hidden costs or various stipulations will lead contractors to increase the price. Similarly, before hiring a contractor, make sure they are giving you a “quote” on a job rather than an "estimate," as the latter has more financial wiggle room. Some contractors will take advantage of your lack of knowledge and skip important steps during renovation projects like venting, priming, and insulation.
You're in the market for a new home, but those prices seem out of reach. At what point is it better to rent rather than buy? Find out which cities are impacted the most. (Scripps News) Photo Credit: Andy Dean Photography / Shutterstock The persistent shortage of housing inventory, stemming from a combination of long- and short-term factors, continues to challenge prospective homebuyers in the U.
S. Since 2022, high mortgage rates have deterred many would-be sellers from listing their properties, fearing the loss of existing low rates. Higher borrowing costs have also caused new residential construction activity to slow, resulting in fewer new units entering the housing market.
At the same time, institutional investors —largely unaffected by mortgage rate fluctuations due to their cash-based transactions—have increasingly acquired a larger share of homes sold. But the current housing shortage, which is now estimated to be between four million and seven million homes , can trace its beginnings to long before the COVID-19 pandemic. In the 10 years following the Great Recession, the United States constructed fewer new homes than in any other decade since the 1960s.
Simply put, the nation has not built a sufficient number of homes—particularly in certain areas—to meet the demands of natural population growth, immigration, urbanization, and a growing number of retirees opting to age in place . Low housing inventory continues to challenge prospective homebuyers in 2024 Source: Construction Coverage analysis of Redfin data | Image Credit: Construction Coverage The result is that over the past decade, the number of homes for sale at any given point in time decreased from more than two million in 2012 to a low of approximately 630,000 at the start of 2022, according to data from Redfin. Over the same time period, months’ supply—a measure of how long it would take existing inventory to sell if no new homes came on the market—plummeted from a high of 7.
5 months to a historic low of 1.1 months. While the inventory deficit has eased slightly since early 2022, the situation is far from ideal for buyers.
Throughout the first quarter of 2024, the national inventory hovered around 970,000 homes for sale, marking a 4.0% year-over-year increase. Despite this uptick, existing inventory would sustain the current sales pace for just 2.
9 months, a marginal increase from 2.8 months recorded last year. Florida, Hawaii, & Montana have the greatest housing supply relative to demand Source: Construction Coverage analysis of Redfin data | Image Credit: Construction Coverage Regionally, the lack of housing affects certain areas more severely than others due to both short- and medium-term market conditions, as well as long-standing trends in construction activity.
An analysis conducted by the National Association of Home Builders showed that throughout the 2010s, approximately 77% of single-family housing starts occurred in the South and West, compared to just 23% in the Midwest and Northeast. These regional disparities manifest in the housing market's current landscape. As of the first quarter of 2024, states with the lowest levels of supply are concentrated in and around the Midwest (such as Kansas with 1.
5 months of supply) and the Northeast (including Rhode Island with 1.8 months of supply). However, Washington state also stands out for having some of the lowest levels of available housing nationally, with just 1.
9 months of supply. In contrast, several states in the South, led by Florida (with 5.2 months of supply), along with Hawaii (5.
2 months) and Montana (5.1 months), present notably more favorable conditions for buyers. In fact, Redfin data indicates that currently, over 55% of homes for sale nationally are located in Southern states, despite these states comprising just 38% of the population.
Florida & Maine recorded the largest increases in housing inventory over the past year Source: Construction Coverage analysis of Redfin data | Image Credit: Construction Coverage Nationally, the number of homes for sale increased by 4.0% between the first quarters of 2023 and 2024. However, this figure varied significantly across states, ranging from a nearly 35% surge in Florida to a 19.
2% decline in Nevada. These discrepancies underscore the distinctive nature of local markets and emphasize the need for individualized policy approaches in addressing housing issues. In Florida for example, demand for homes shot up dramatically during COVID-19 as remote workers from other states sought out affordable, warm-weather locales with more lenient pandemic regulations.
Builders capitalized on this surge, constructing substantially more homes than in any other state but Texas. But now, as softer demand from out-of-state residents coincides with a large cohort of Florida homeowners eager to capitalize on the appreciation of their home values, a surplus of homes has flooded the market. A similar situation is currently playing out in Texas.
Among the nation’s largest cities, Denver, El Paso, and Dallas recorded the largest year-over-year increases in housing inventory. At the opposite end of the spectrum, Las Vegas, Raleigh, and Chicago recorded the biggest declines. Below is a breakdown of housing inventory growth across the top and bottom cities and states.
The analysis was conducted by Construction Coverage , a website that compares construction software and insurance, using data from Redfin. Refer to the original post, U.S.
Cities With the Biggest Increase in Housing Inventory on Construction Coverage, for additional details and complete results. Photo Credit: Andy Dean Photography / Shutterstock To determine the locations with the biggest increases in housing inventory, researchers at Construction Coverage analyzed the latest data from Redfin . The researchers ranked locations based on the percentage change in the average monthly housing inventory between Q1 2023 and Q1 2024.
In the event of a tie, the location with the greater total change in average monthly housing inventory was ranked higher. Researchers also calculated the average months’ supply and median sale price for the same periods. To improve relevance, only cities with at least 100,000 people and complete data across all statistics were included in the analysis.
Additionally, cities were grouped into the following cohorts based on population size: small cities (100,000–149,999), midsize cities (150,000–349,999), and large cities (350,000 or more). For complete results, see U.S.
Cities With the Biggest Increase in Housing Inventory on Construction Coverage. The-CNN-WireTM & © 2024 Cable News Network, Inc., a Warner Bros.
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