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With just the first stirrings of recovery taking shape across the nation, how could buyers, who have been scarcer than hen's teeth since the fleeting 2010 tax credit boom, suddenly be in the market for larger and more expensive homes?

Forget Green Building, Buyers Still Want Bigger Houses

With just the first stirrings of recovery taking shape across the nation, how could buyers, who have been scarcer than hen’s teeth since the fleeting 2010 tax credit boom, suddenly be in the market for larger and more expensive homes?

In a trend reminiscent of the explosion of the SUV and pick-up truck markets during times of rising oil prices, demand for larger homes has continued and perhaps even increased despite millions of foreclosures, negative equity over 25 percent and a trend towards greener, smaller new home construction.

Last week Coldwell Banker reported that house hunters using its site,, are looking at larger homes. Visitors are looking at homes that average 3.31 bedrooms and 2.36 bedrooms, up 2.2 percent and 17 percent respectively, since February. The number of rooms has remained flat at 6.44.

The CB analytics may confirm to other recent reports suggesting that bigger is booming. Last month the American Institute of Architects’ first-quarter Home Design Trends Survey found that eight percent of the 500 architecture firms responding say square footage of homes increased in the first quarter, up from 5 percent a year ago. This change, the biggest year-over-year jump since the survey started in 2005, ends a multiyear march toward smaller homes driven by the housing implosion.

Another recent report, this one from the Census Bureau, reports that for ten years consumer demand for larger homes has been growing, despite the housing depression and the green movement in home construction. The percentage of new single-family homes greater than 3,000 square feet has grown by one-third in the last decade, according to data released last month by the U.S. Census Bureau. The Census Bureau reports that the average size of a U.S. house rose in 2011 to 2,480 square feet, up from 2,392 square feet in 2010.

Last year, the average new home a size was 62.6 percent larger than the 1,525-square-foot average size in 1973. Slightly more than 1 in 4 new homes built last year were larger than 3,000 square feet, the highest percentage since 2007. Larger homes include two-story foyers, twin front staircases, children’s wings, dedicated man caves, coffee bars, four-car garages, and bedroom closets large enough for a fifth vehicle.

The trend to bigger homes runs counter to the expectations of the National Association of Home Builders (NAHB), which released a survey of home builders in May that shows that in the future builders will be downsizing their offerings in the belief that the housing downturn has permanently changed what Americans are looking for in their next home.

Builders surveyed in the NAHB study expected homes to average 2,152 square feet by 2015, 10 percent smaller than the average size of single-family homes started in the first three quarters of 2010 and 13 percent smaller than the average size of new homes last year, as reported by the Census Bureau.

So what’s going on? Are builders missing the boat? Were smaller homes never really in vogue with new home buyers, but rather simply politically correct, a temporary change resulting from tight credit, high unemployment, and a lack of equity? Apparently, the answer is yes.

When last year’s Census report showed squarer footage zoomed to 2,522 square feet-larger than during the height of the boom-Builder Magazine took note and analyzed data from 12 metro areas around the country-including Boise, Idaho; Boston; Chicago; Denver; Houston; Orlando, Fla.; Philadelphia; Phoenix; Raleigh, N.C.; Salt Lake City; Seattle; and Washington, D.C.-looking at a range of data from home sizes to financing to unemployment and others, between 2005 and 2011.

Among the 12 MSAs analyzed last year, all but one saw average home sizes fall over the six-year period, and all saw a decline in price per square foot. However, builders, not buyers, determined house size and in the past year, builders ranking from KB Homes to Toll Brothers are busy building bigger.

The one metro that bucked the trend for shrinking sizes was Philadelphia, which saw a small uptick in home sizes between the years, moving up 0.61 percent to an average of 1,829 square feet among all housing types. The market also saw the smallest decline in price per square foot, which dropped only 1.4 percent.

The study confirmed that consumers are not sold on smaller homes and if they can afford more, they will buy more. In recent years, buyers must be more qualified than before, so those they do qualify often can afford a larger home. Most are getting the most that they can afford. “Nobody wants a smaller home, necessarily. It’s really what they need. In this economy, people are weighing wants versus needs,” said a Philadelphia area builder.

In other markets studied by Builder, new home size declined not in response to changing consumer demand, but to the difficulties builders have faced getting construction loans. Financing also constricts the ability of buyers to get a loan. “I do think there’s still a big market for a big house, but it’s just a problem of getting the loan,” said an Orlando builder.

However, hopes for a shift back to smaller homes are not dead. “The moment first-time buyers are able to come back into the market, and both buyers and builders regain access to credit, we expect sizes to ease again,” said a Boise builder. “That’s very odd for those jumps to have taken place in one year.”


  1. Curiouser and curiouser. But I wonder if the criteria for what counts in square feet is the same now as historically? One thought is that, if garage space is included, square footage will likely rise in keeping with the trend for more than one car per family.

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