It’s a strange time for houses to get bigger. The housing bust was followed by sharp criticisms of excesses such as McMansions and started a movement toward tiny houses. Combined with America’s aging, “empty nester” population, increasing environmental concerns and smaller household sizes, you might think the U.S. would want to build smaller houses. We haven’t.

As of the last Census, the median house was 2,384 square feet—in between the sizes of a single and a doubles tennis courts. That’s up from  1,525 square feet in 1970, with a rise punctuated only by a brief stall during the recession. Over the last decade the median house size has increased on average about 25 square feet per year, and the share of new homes with 4+ bedrooms and 3+ full baths is going up. Why are new houses still getting bigger?



Though the rate of new foreclosures has fallen, there are still many on the market. The housing bust resulted in contractors building way fewer houses in general. There’s little need for contractors to build what’s already plentiful on the housing market, which includes plenty of mid-sized and small houses.



Mortgage qualifications remain tight as banks seek to dial back on the easy credit responsible for the housing bubble in the first place. This means that people with lower credit scores are having trouble getting mortgages as incomes stagnate for the middle class. Additionally first-time buyers, who are traditionally less wealthy than those who have already purchased a home, are more likely to go for smaller and used homes. New houses are about 20% more expensive than a lived-in home of equal size.



Well-heeled buyers have typically gone for larger, new homes. They haven’t typically been the only portion of the market buying new houses—until recently. “The market has shrunk to a level where a very small segment of buyers is driving what the market looks like,” according to Rose Quint, assistant vice president of survey research at the National Association of Home Builders. “Until there’s a more representative sample of buyers [for new houses], they will continue to dominate how the market looks.”



NAHB’s Ms. Quint denies that bigger homes are necessarily more profitable to builders, saying that the rise in bigger houses is instead “capitalism at its best.” According to Ms. Quint, “Whatever is selling, [contractors] will build. If it was first-timer, starter homes that would sell, that’s what they’d build.”



According to data from both the NAHB and Trulia, Americans usually want bigger houses—17% more space than they have. “As incomes go up, people are able to consume more housing, more entertainment, more tech and everything else,” according to Jed Kolko, Trulia’s chief economist. “We’d expect, as society gets richer—in the long run, not just over a year or a decade—people to live in larger housing.” According to Mr. Kolko, “The kind of thing that could change this is if we got poorer, or if attitudes or policies made large homes less desirable.” For now, big is king.


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