Home sizes have oscillated in the years since the onset of the COVID-19 pandemic, first increasing as homeowners prioritized additional living and working space before declining as affordability concerns continued to mount. According to the most recent data from the U.S. Census Bureau, the median single-family square floor area was just above the lowest reading since 2009, illustrating the impact of housing affordability challenges. In a post on NAHB’s Eye on Housing blog, chief economist Rob Dietz hypothesizes that with long-term interest rates likely to decline in the near future, home sizes may once again be reaching a turning point and begin increasing once again.
With lower long-term interest rates coming into view, will new single-family home size reverse and move higher in 2025?
According to third quarter 2024 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area was 2,158 square feet, just off the lowest reading since the second half of 2009. Average (mean) square footage for new single-family homes registered at 2,348 square feet.
The average size of a new single-family home, on a one-year moving average basis, trended lower to 2,366 square feet, while the median size is at 2,150 square feet.
Home size increased from 2009 to 2015 as entry-level new construction lost market share. Home size declined between 2016 and 2020 as more starter homes were developed. After a brief increase during the post-COVID building boom, home size has trended lower due to declining affordability conditions. As interest rates decline, new home size could level off and increase in the quarters ahead.
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