Trend Towards Smaller Homes Continue

New single-family homes are getting smaller, and the trend is likely to last well beyond the recession, according to research from the National Association of Homebuilders (NAHB). The median size of a new single-family home has dropped from a peak of 2,268 square feet in 2006 to 2,100 square feet in 2009. Homebuilders attribute the recent decline in home size to consumers' desire to keep energy costs down, the lack of equity in existing homes available to roll over into new ones, tighter credit standards, less interest in buying homes as investments, and a growing number of first-time buyers. Despite the trend toward smaller homes, the average number of bathrooms and bedrooms has showed little change, while three-car garages, fireplaces, patios and decks have declined in popularity. "A new housing market is emerging, and even with the recession in the rear-view mirror, we expect the popularity of smaller homes to persist," says Bob Jones, NAHB's chairman. "Builders are responding to a new mindset among homebuyers that has been shaped not just by a weak economy, and it is transforming the product they deliver."