The size of the typical new home in the U.S. is decreasing, and this has implications for buyers.

• In 2023, the average size of newly constructed homes decreased to 2,411 square feet, which is the smallest size in 13 years, as per the National Association of Home Builders.
• When purchasing a home in the U.S., it's essential to consider the decreasing typical size.

Newly built houses on the market are smaller than those sold a decade ago. Determine if this is a positive or negative aspect based on your priorities for your future home.

According to the U.S. Census Bureau, a newly constructed single family home in the first quarter of 2024 had a median floor space of 2,140 square feet.

Since the second half of 2009, the smallest new homes have been built, according to the National Association of Home Builders.

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Since 2015, the average home size has been decreasing, with the peak at 2,689 square feet in that year. However, the only year that saw an increase in home sizes was in 2021, due to the pandemic lockdown leading to a demand for more space for working or studying from home, according to the analysis.

Buyers want smaller homes

Experts say that the trend towards smaller homes is driven by both high prices and buyer demand. Homebuyers are increasingly choosing smaller homes as a compromise or because they prefer a more compact living space.

In 2003, the typical buyer desired a 2,260-square-foot home, but in 2024, the NAHB's study revealed that the typical buyer now wants a 2,067-square-foot home.

"According to Robert Dietz, chief economist for NAHB, buyers in a low-inventory, low-housing-affordability environment are influenced by their surroundings and may have to make concessions."

Nearly 30% of recent homebuyers in the U.S. are single, according to Jessica Lautz, deputy chief economist at the National Association of Realtors.

She stated that they might not require 2,000 square feet and may not desire it for themselves.

According to the NAR's 2024 Home Buyers and Sellers Generational Trends Report, 28% of polled buyers recently purchased a home between 1,501 to 2,000 square feet, while 26% purchased a home between 2,001 to 2,500 square feet. Additionally, 16% of buyers bought a home that's 1,500 square feet or smaller.

A total of 6,817 responses were received from homebuyers aged 18 and above who purchased a home between July 2022 and July 2023.

How zoning influences home sizes

In 2023, approximately 38% of builders constructed smaller homes, while 26% plan to build even smaller homes this year, according to NAHB.

Zoning rules may also influence the trend, in addition to buyer demand.

Dietz stated that some jurisdictions employ "exclusionary zoning practices," which mandate a minimum lot size for builders.

Dietz stated that if you're constructing a house in a specific area and the lot size is at least half an acre or close to a full acre, you won't be able to build a small home on that land.

The increase in zoning regulations and associated expenses posed a challenge for builders to construct smaller homes following the Great Recession, according to him.

As some areas relax their zoning rules, builders are now able to construct smaller homes in the form of townhouses, according to Dietz.

According to U.S. Census data, about 42,000 townhouses were constructed in the first quarter of 2024, which is a 45% increase from the same period in 2023, as reported by NAHB.

"Dietz stated that he believes the issue is not restricted to a specific region or type of geography, but rather occurs in areas where zoning is allowed for medium-density environments."

'A shrinking of the space in the required rooms'

Dietz stated that when buyers on the market are considering a home around the median size of 2,000 square feet, they are essentially reducing the space in the required rooms.

You could consider using your spaces for multiple purposes, experts say.

"Dietz stated that they do not have a dedicated office, as their dining room/kitchen serves as his wife's office."

A smaller property requires space-saving storage, he stated.

Dietz stated, "We've converted every space in our home that can be used for storage."

Lautz stated that due to the pandemic, homeowners reevaluated their homes' perspectives.

Could I use that extra bedroom as a home office or gym, some asked.

Lower energy and maintenance costs can result from a smaller property, she stated.

If you're a buyer looking for traditional home spaces like dining rooms, you can still find existing homes on the market with such features, Lautz said.

She stated that properties will always have an ebb and flow in how they are used.