Demand for more space during the coronavirus pandemic may be reversing a recent trend toward slightly smaller homes.
The average size of a new single-family home peaked at 2,689 square feet five years ago, according to U.S. Census Bureau data. Picture maybe a two-story house with four bedrooms and two and a half baths.
That average has been falling gradually ever since, as more millennials have entered the market seeking affordable first homes, said Rose Quint, who researches housing trends with the National Association of Home Builders.
“Because of the pandemic, we are seeing data already that builders are getting more requests for larger homes because people want more space,” she said.
Quint predicts numbers for the second half of this year will show average home size growing again, as buyers look for space to work, go to school and exercise — at home.
A return to bigger floor plans isn’t great for the environment, said Maurie Cohen, who teaches sustainability at the New Jersey Institute of Technology. The larger the home, the more carbon emitted in the construction process. Larger spaces also require more energy to heat and cool, he said.
“There has been very little attention devoted to the fact that if we’re really serious about reducing greenhouse gas emissions and making a meaningful contribution on climate change, that one of the more surefire ways of doing so is by focusing on a reduction in home size,” Cohen said.
But even if people want bigger houses, they can’t necessarily afford them, said Ali Wolf, chief economist at Zonda, a housing data and consulting firm. Home prices have continued to grow during the pandemic as building costs rise and buyers taking advantage of low mortgage interest rates compete for a limited supply of homes for sale.
“Builders are really struggling with, ‘Should we build larger homes that may have to come with a larger price tag? Or do we keep building attainable homes and figure out creative solutions so that people can still use their home as a gym and as a home office, but they can also afford it without stretching their budget?’” Wolf said.
One builder she knows took a bit of extra closet space and turned it into a Zoom room — just big enough for a desk and chair.
Same square footage, whole different vibe.
COVID-19 Economy FAQs
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
How long will it be until the economy is back to normal?
It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.
How are those COVID relief payments affecting consumers?
Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.
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