New homes are getting bigger, which has helped in balancing out price appreciation while the market sees low inventory and high demand, reports CoreLogic Chief Economist Frank Nothaft, based on Census Bureau data on new residential construction.
Between 1990 and 2016, median square footage of new homes expanded across the board, according to public records data from CoreLogic. Beginning at 1,930 square feet in 1990, the median square footage rose to 2,230 square feet right before the market crash in 2006 and progressively dropped until 2009, when it began to rise again. In 2013, the median returned to 2,300 square feet. Median square footage for resale properties has remained steady throughout this 26-year span, starting at 1,645 square feet in 1990 and increasing by a small amount to 1,724 square feet in 2016.
As interiors have seen increases, external spaces have seen decreases in square footage. In 1990, the median lot size for a newly built home was 8,250 square feet. Since then the median lot size dropped nearly 16 percent to 6,970 square feet in 2016. Resale lots have continued to be significantly larger, remaining between 9,000 and 9,500 square feet.
Is there a solution?
While buyers want larger homes accompanied with larger lots, they don’t want the price tag that comes with them, adds CoreLogic. When the market plummeted, buyers could have both for a cheaper price, but as home prices have soared, these simple luxuries can seem out of reach. Therefore, homebuilders’ responses have been to provide larger homes with the sacrifice of expansive outdoor space.