Builders Building Bigger Homes Than Buyers Want

In 2023, the median size of single-family homes started by builders was 2,200 square feet, but the median size desired by homebuyers was only 2,067 square feet, according to the National Association of Home Builders.

The trend of building bigger homes than buyers wanted persisted in most square-foot ranges, particularly those larger than 1,600 square feet. The breakdown for last year was as follows:

• Under 1,200 square feet: 4% of homes started, 8% of buyers wanted
• 1,200-1,599 square feet: 12% of homes started, 18% of buyers wanted
• 1,600-1,999 square feet: 22% of homes started, 21% of buyers wanted
• 2,000-2,999 square feet: 40% of homes started, 38% of buyers wanted
• 3,000-3,999 square feet: 15% of homes started, 8% of buyers wanted
• 4,000+ square feet: 7% of homes started, 6% of buyers wanted

These numbers suggest that the amount of smaller single-family homes being built may not be meeting homebuyers’ demands.

However, although newly built homes are often on the larger side, builders may be compensating for existing housing stock. The median size of an existing single-family home is about 1,800 square feet, and a third of existing homes nationwide measure less than 1,500 square feet. With the median American homebuyer looking for a home that’s 267 square feet larger than the median existing single-family home, builders are likely trying to make up for the amount of smaller existing homes by building new larger ones.

Still, although buyers are generally seeking homes that are larger than many existing ones, the average home size is shrinking, and many homebuyers are prioritizing better homes over bigger homes.