The Average American Home: Bigger than Ever

In America, you've probably heard the phase, "bigger is better." This philosophy is manifested in U.S. home sizes, which have steadily increased over time. According to the Census Bureau, the average home size grew from 1,725 square feet in 1983 to 2,598 square feet in 2013--an increase of 50%!

Many trends explain this phenomenon. First, the wealthily have gotten wealthier, and are buying bigger homes to show for it. The market for homes 4,000 square feet or more has increased from 6.6% in 2005 to 9% in 2013. Homes between 3,000 and 4,000 square feet have increased even more--from 15.6 % to 21.7% over the same time period. Director of Economic Services for the National Association of Home Builders Stephan Melman states that people who have invested in the stock market have seen their money double since 2009. 

On another note, first-time homebuyers are finding it more difficult to buy homes, thanks to student debt and trouble getting mortgages. Because first-time homebuyers make up the majority of the market for small homes, the market for such homes (1400 square feet and less) has decreased from 9% in 2005 to only 4% in 2013. The average first-time homebuyer in 2013 was 31 years old according the National Association of Realtors. 

Third, people are demanding more from their homes. Buyers want home offices, play rooms, walk-in closets and oversized bathrooms. Parents want their children to each have their own room. For many, a one car garage will no longer suffice. Therefore, alongside the increase in home size, the number of rooms in the average home is increasing as well.

Another trend that helps explain the increase in home size involves the current rental market. Rental rates have increased since 2006 by roughly 20%---turning many homeowners into landlords to order to help pay off home mortgages. People who move into a larger home are more inclined to hang on to their previous home as a rental given their low mortgage rates. Glenn Kelman, CEO of the brokerage firm Redfin, points out that every home converted into a rental means one less home on the market, contributing to low inventory and limited sales growth.

If you are interested in buying a home, be it small or large, contact me to see how I can help. I work for all types of buyers, from first-time homeowners to empty nesters. Click here to view my featured listings.