There are only two realities when talking about homes in the U.S. First, they’re typically expensive. Second, they’re getting bigger — perhaps a lot bigger than they used to be years ago. Data from the National Association of Home Builders state that 66 years ago, homes were a mere 983 square feet on average. In 2015, the average number ballooned to 2,720 square feet.
A quick look at the sites of various custom home builders, including Keystone Construction, makes this evident. According to experts, the average numbers are climbing since higher-end homes are included. This market in particular is experiencing massive growth. Homes that are about 5,000-8,000 sq ft seem to be ‘mass-produced’: built quickly on small lots and packed together closely. They’re ingeniously called ‘McMansions’ because of this – reminiscent of how fast food restaurants churn out orders.
Larger Homes, Smaller Lots
There’s another trend at play here. While homes are getting bigger, lots are doing the opposite. Data from Zillow show a steady decline in lot area from 2010 onwards, with actual structure square footage climbing up. According to Zillow Chief Economist Svenja Gudell, Americans may be able to afford a bigger home, but sizeable lots are still out of reach, especially those near job centers.
Strong Housing Market? Not Exactly
According to the Wall Street Journal, bigger homes don’t mean a stronger market. It’s because new construction is leaning towards the high-end spectrum, and that builders are looking to entice young buyers at lower price points. This, in turn, opens up the market for pricier properties. Land prices also affected builders lately — since lots are more expensive, starter homes aren’t much of a priority for builders.
It’s because a good number of Americans can afford it, according to Investopedia. There’s really no reason to hold back if one can afford it. But, this often comes with the smaller lot tradeoff for most. Furthermore, interest rates on mortgages (which hit record-lows recently) and aggressive marketing of high-end homes add fuel to the fire.