Find out why the size (and price) of new homes in the United States continues to grow even though many people looking to buy a home can't begin to afford these whoppers.
For many Americans, when choosing a home, it’s the bigger, the better.
According to the National Association of Home Builders, the average size of a new home in the United States swelled to 2,720 square feet in 2015, up from 2,660 square feet in 2014. Nearly half of the homes that were started in 2015 had four or more bedrooms, 38 percent had at least three full bathrooms and about a quarter of the homes had garages that could fit three or more vehicles, The Wall Street Journal reports.
This was the fifth consecutive year that the average square footage of new home construction in the United States has climbed upward. Not surprisingly, that extra square footage carries a heftier price tag. The average sale price of new homes hit $351,000 in 2015, according to the WSJ. That’s a whopping $100,000 more than new home prices in 2009.
Although you may be inclined to think that bigger, more expensive homes are indicative of a strong housing market, that’s not necessarily the case. Says the WSJ:
Home sizes have grown lately because new construction has been tilted toward the high end. Builders do aim to draw young buyers in at lower price points, so that there is a market for some of their more expensive products over the long term. But they haven’t made more starter homes in recent years mainly because of land prices, construction costs and lack of available mortgages for less-affluent buyers.
Millennials — the generation of Americans ages 25 to 34 – have been notably absent from the new-home market and from the housing market in general. In fact, homeownership has dropped among young Americans for the past 10 years, according to MarketWatch.
Millennials need to enter the new home-buying market before we’ll see any change in the size of new homes in the United States, according to Rose Quint, assistant vice president of survey research for economics and housing policy at the home builders association, speaking to MarketWatch. At the moment, the market is being driven by the wealthy.
So, for now, there is a “disconnect between the home that would be built if everyone was in the market and the homes that are actually being built,” Quint explained.
Today’s new homes are more than 60 percent larger than those newly built in 1973, according to Pew Research Center.
How big is your home? What do you think of the size — and price — of new home construction in the United States? Share your comments below or on our Facebook page.