The percentage of new single-family homes constructed in the range of 1,600 to 3,000 square feet is tracking closely with the share of buyers seeking homes of that size, according to a data study from the National Association of Home Builders (NAHB) and the U.S. Census Bureau.
The new data determined that that 21% of buyers want homes with 1,600 to 1,999 square feet while and 22% of new single-family homes started in 2023 have that much floor space. In the next tier up, 38% of buyers are seeking homes with 2,000 to 2,999 square feet and 40% of new single-family homes are within that size range.
However, the balance between demand and supply becomes lopsided outside of that range. While 26% of buyers want homes under 1,600 square feet, only 16% of single-family homes started in 2023 fit those dimensions, while 22% of new homes have at least 3,000 square feet even though only 14% of buyers are looking for homes that large.
“Part of the reason for the apparent mismatch, of course, is that builders are compensating for the existing stock of housing, much of which was built decades ago when homes tended to be smaller,” said NAHB Senior Economist Paul Emrath.
Citing the most recent American Housing Survey, Emrath added, “A full one-third of existing homes in the US have less than 1,500 square feet of floor space. Moreover, the median size of an existing single-family detached home is 1,800 square feet, compared to 2,200 square feet for single-family homes started in 2023 and the 2,067 square feet that home buyers say they want in the NAHB survey. In other words, the median buyer wants a home that is 133 square feet smaller than the median new single-family home, but still 267 square feet larger than the median existing single-family detached home.”
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