Following the pandemic-driven desire for more living space in homes, the average size of new single-family homes decreased in 2022, Rose Quint, the assistant vice president for survey research for the NAHB, shared during The Outlook: A Complete Guide to Housing Trends, Forecasts & Insights for 2023 session at the 2023 International Builders' Show. During the session, Donald Ruthroff, founder and principal of California-based Design Story Spaces, shared how design trends are shifting to focus on the health of residents and to maximize smaller spaces.
Quint shared that several home characteristics, including homes with three or more bathrooms and those with garages for three or more cars, followed similar patterns to home size, increasing in market share during 2021 and decreasing in 2022. New single-family homes with four or more bedrooms have increased in market share each of the past three years, reaching a share of 48% in 2022.
“[Four bedrooms] is a characteristic that is sticking around because the bedrooms are not just being used for sleeping and for shelter, but also for home offices and to provide housing for adults between the ages of 25 and 34 who are coming back and living with their parents,” Quint said.
Quint forecast that the average home size and the market share of amenities such as three or more bathrooms and three-car garages would increase in 2023 due to the projected decrease in single-family starts. Homes will trend larger in part because many potential buyers will not have access to the market due to affordability concerns, shrinking the number of buyers and shifting the market toward buyers with higher levels of income. However, the projected fast rebound of the housing market and housing starts in 2024 will reverse trends for size and amenities, Quint said, favoring younger and first-time buyers who may be able to access the housing market.
Top Design Trends for 2023
In part due to the pandemic, Ruthroff said health has become a top design trend for 2023 and beyond. New communities with walking paths are popular among prospective buyers, and homeowners favor spaces that promote a connection to the outdoors. Ruthroff said biophilic design—incorporating natural materials into design plans—is a popular way to promote the health and well-being of residents.
He said homes that feature “better, not bigger” elements help attainability amid ongoing affordability challenges, particularly for first-time buyers.
“By shrinking homes, we don’t have to make them not work as well. [Instead], we have to work harder to make them work better,” Ruthroff said. “We need to make our homes feel like they are as big as they were when they are [actually] smaller.”
Kitchens are the top area where design choices, related to layout and storage, can help deliver more efficiency for homeowners in smaller spaces, he said. Additionally, flex spaces, such as offices that become playrooms, are an opportunity to deliver value to homeowners without requiring additional square footage. Open floor plans help achieve connectivity in the core living areas and provide efficient design.
Ruthroff also highlighted how edited, simple design resonates with buyers more than “extravagant” design. Choices made related to color, form, and materiality can help achieve successful design without an overwhelming amount of features.
Impact of COVID-19 on Demand
Quint said buyer demand for home offices, home technology, and exterior amenities experienced a strong increase in demand directly related to lifestyle changes during the pandemic. Similarly, the desire for flex spaces within homes, open floor plans, maintenance-free materials, and large entertainment spaces also experienced demand boosts related to the pandemic.
Buyer preferences post-pandemic have also shifted toward wanting energy-efficient features, larger kitchens, water-conserving measures, and community amenities with outdoor experiences, according to Quint.
Preferences for First-Time Vs. Repeat Buyers
According to Quint, among prospective buyers surveyed by the NAHB, repeat buyers are more likely to want single-family detached homes than first-time buyers, while first-time buyers are more willing to purchase townhomes than repeat buyers. First-time buyers are also more likely to want homes in central cities, whereas repeat buyers prefer homes located either in the suburbs or rural areas.
A plurality of both first-time and repeat buyers prefer homes with three bedrooms, two or two-and-a-half bathrooms, and laundry on the first floor, according to Quint. First-time buyers favor electric cooking, heating and cooling, and water heating, while repeat buyers favor gas for both water and cooking.
Among the most wanted features for home buyers, both repeat and first-time buyers want laundry rooms, walk-in pantries, hardwood flooring on the main level, a patio, a double kitchen sink, and security cameras. First-time buyers also favor areas for eating space in the kitchen and exterior lighting, while repeat buyers favor Energy Star windows and appliances as well as efficient lighting, Quint said. Across all cohorts of buyers, she added that buyers are most willing to compromise on home size, simpler interiors, and fewer exterior amenities if a compromise means prospective buyers are able to make a home purchase instead of continuing to rent.