After 30 years during which the average U.S. new single family home size grew by more than 45 percent, new home sizes may finally be leveling off or even shrinking, according to the U.S. Census Bureau.
The average new single family home in the U.S. was 2,469 square feet in 2006, up from 1,700 square feet in 1976, according to the Census Bureau. In 2007, however, findings from The American Institute of Architects (AIA) indicate that home sizes may be decreasing.
“For the first quarter of 2007, more residential architects report home sizes to be decreasing (26 percent) than report them to be increasing (21 percent),” according to the AIA Home Design Trends Study for the first quarter of 2007.
Furthermore, a smaller share of respondents reports the volume of space in homes (e.g., ceiling heights) to be increasing: 31 percent of respondents report the volume of space in homes to be on the rise, compared to 47 percent in 2006 and 51 percent in 2005,” according to the survey.
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Households are focusing less on the amount of space in the home and more on how that space is used, with accessibility and informal, multi-purpose areas growing in popularity, according to the survey.
Outdoor living areas are also growing popular, even as lot sizes shrink, according to the survey.
Lower price appreciation across the nation, coupled with higher short-term interest rates “are no doubt a contributing factor in households moderating their expectations,” and rising home energy costs are also discouraging larger homes, according to the survey. “Many households are finding that improved use of existing space in their homes reduces the need for additional square footage.”
The leveling off trend in home sizes is likely to continue well into the future, according to the Home of the Future report by the National Association of Home Builders. The average size of a new single family home in 2015 is predicted to be 2,300 to 2,500 square feet, according to the report.
The living room is the area of the home most likely to decrease, and the family room is most likely to increase, according to the report. The living room is likely to vanish entirely in many average homes and to become a parlor/retreat/library or music room in upscale homes, according to the report.
An increased demand for energy efficient appliances and mechanical equipment is expected in both average and upscale homes, according to the report.
As baby boomers downsize (see our article on ), the trend toward smaller home sizes may continue. Investors who are developing or purchasing new homes should pay close attention to these home size trends to make sure they don’t overpay for unnecessary square footage.