The New Home Math: Smaller Sized Homes On Smaller Lots With More Bedrooms.

September 26, 2024
  • Sales Of New 4-Bedroom Homes Account For Half Of New Home Sales
  • Average Size Of New Homes And Lot Size Continues To Fall
  • Wages Have Not Kept Pace With Housing Prices

Homebuilding trends are getting confusing, so I’m going to keep this super simple. The sale of new 4-bedroom homes has skyrocketed in market share, while the average size of a new home has fallen steadily for the past decade. More bedrooms in a smaller space on less land is inferred from the following graphics. Can we blame smaller lot sizes on the proliferation of video games or dating apps? We probably could.

Nearly half of all new homes now have four bedrooms, up from about one-quarter fifty years ago.

Rising home prices that are outpacing wages are probably requiring builders to focus on smaller homes on smaller lots.

Source: NAHB
Source: NAHB

A Smaller Final Thought

While I would typically go down a rabbit hole here to uncover a hidden meaning to this odd trend, it seems profoundly simple (and I’ve had a busy day). As home prices are rising faster than wages, builders still need to include the “bells and whistles” to aspirational home buyers flooded with “luxury” marketing. The builders, out of necessity, create smaller new homes with more rooms on less land.

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