The “tiny house” craze may have been short-lived but it left a big imprint on the market.
After leveling off or decreasing slightly for years prior, the average size of a new home fell in 2017. This remarkable development seems to indicate the start of a new trend.
Though the average square footage of a new home fell during the Recession as many downsized, it also jumped as the higher end of the market became the fastest segment to recover.
NAHB analysts identified this as the usual pattern of home building throughout a recession, as builders tighten budgets and then chase buyers. This pattern lasted longer than usual, however, because of the restraints on first-time buyers entering the marketplace.
The size of new homes is now out of its recession pattern, which indicates that the reduced square footage seen in many new homes does form a genuine trend. Houzz recently conducted a survey of homeowners who live in “1,000 square feet or less” to find out how they felt about their decision to purchase a small home. Homeowners reported their smaller homes were more “relaxing” (58% of small home owners) and easier to clean (42%). Many cited affordability as their motivation in seeking out a smaller home. The only downsides included less storage and reduced space for entertaining and hosting visitors.
New multifamily units are also trending smaller on average, especially in the for-sale multifamily market, a segment which faces stiff competition from the booming rental market.