There’s the media room. The playroom. The formal living room. The formal dining room, plus an eat-in kitchen. American houses just keep getting bigger. A typical new single-family home built in the U.S. last year was about 2,400 square feet, slightly bigger than the pre-recession highs of 2007, according to the U.S. Census Bureau.
Robert Dietz, an economist with the National Association of Home Builders, says it’s all about who is able to buy these days.
“The average buyer is typically older,” Dietz says. “It’s a move-up buyer, someone who has more income or wealth, and someone like that is more likely to buy a larger home.”
The move to bigger homes also benefits builders, who typically have better profit margins on larger properties.
“The cost for that next 100 square feet of space isn’t that much more,” says Mark Goldman, who teaches real estate finance at San Diego State University, noting the more bathrooms or higher finishes can be more expensive for builders than simply adding more square footage.
Newly built homes briefly shrank in size during the recession, leading to some speculation that Americans might finally be done with super-sized homes.
Not so, says Goldman, the census data signals “the return of the McMansion.”
Recession aside, America has been consistently increasing the size of homes over the last 80 years, says Stan Humphries, chief economist the real estate website Zillow. That’s due in part to more leisure time spent in the home. The current exception is Millennials, who seem perfectly content in increasingly small rentals.
However, Humphries thinks that could change when they go to buy.
“You may love having your 250-square foot place where you store your sweaters and your jeans in the dishwasher,” he says. “But once you’re married and have kids, that arrangement looks entirely different.”
And that big house in the suburbs could start to look pretty good.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?