Reuters

New data from the National Association of Homebuilders suggest it hasn't happened yet.

Remember that much-anticipated trend toward smaller houses? You know the one - because of the recession and housing bust, home buyers will be more cost-conscious and less frivolous going forward. 

Well, it hasn’t happened, at least not yet. And it probably won’t as long as lenders keep a tight grip on their wallets, according to figures reported recently at the annual convention of the National Association of Home Builders in Orlando. 

Through the first half of last year, the typical single-family house measured 2,522 square feet, according to the U.S. Census Bureau. That’s 141 square feet larger than the 2,381 square feet recorded in 2010. And it’s 18 square feet larger than the record 2,504 square feet counted in 2007. 

That means that even as builders were putting up the fewest houses since World War II last year, they also were erecting the largest ones, with more bedrooms, bathrooms, and finished basements than ever before. 

Why more instead of less? First-time buyers - the purchasers who tend to go for smaller, less expensive houses with fewer features and amenities - were largely ignored by home builders in favor of people moving up to their second, third, and fourth houses, explains Rose Quint, a research specialist at the NAHB. Those are the people who have well-documented incomes, strong employment histories, great credit, and lots of cash for a down payment.

Those are also the people who tend to go for a lot of splash and flash. 

"The market was dominated by a segment of buyers who tend to buy better-than-average homes," Quint says. "You pretty much had to be a superstar to buy last year, and that forced builders to chop off the lower half of the market."

However, the NAHB economist says she thinks a trend toward smaller homes finally will take root once lenders loosen their requirements and "allow less-creditworthy buyers back into the market." But that won’t happen this year, at least not if what builders told the association in a December poll is on target. 

The survey found that builders are still producing for well-heeled folks. Not only are 47 percent of builders planning no change in the size of the houses they put in the ground this year, 14 percent said they are switching to larger models. Similarly, while 38 percent indicated that they are sticking to their current price range, 12 percent said they were moving toward more expensive product.

Reprinted with permission from Urban Land, the online publication of the Urban Land Institute; copyright 2012 by the Urban Land Institute.

About the Author

Lew Sichelman

Lew Sichelman writes for Urban Land.

Most Popular

  1. Two New York City subway cars derailed on the A line in Harlem Tuesday, another reminder of the MTA's many problems.
    Transportation

    Overcrowding Is Not the New York Subway's Problem

    Yes, the trains are packed. But don’t blame the victims of the city’s transit meltdown.

  2. Members of a tenants' organization in East Harlem gather outside the office of landlord developer Dawnay, Day Group, as lawyers attempt to serve the company with court papers on behalf of tenants, during a press conference in New York. The tenant's group, Movement for Justice in El Barrio, filed suit against Dawnay, Day Group, the London-based investment corporation "for harassing tenants by falsely and illegally charging fees in attempts to push immigrant families from their homes and gentrify the neighborhood," said Chaumtoli Huq, an attorney for the tenants.
    Equity

    Toward Being a Better Gentrifier

    There’s a right way and a wrong way to be a neighbor during a time of rapid community change.

  3. Homeless individuals inside a shelter in Vienna in 2010
    Equity

    How Vienna Solved Homelessness

    What lessons could Seattle draw from their success?

  4. Citi Bikes are pictured.
    Videos

    A Stark Comparison of Parking Vs. Bike-Share Spaces

    Watch New Yorkers swarm a Citi Bike station like mad ants while cars sit virtually idle across the street.

  5. Equity

    An Elegy for 'The Hood'

    The death of the rapper Prodigy raises a few questions: Is “the hood” over—and why did we ever need it to begin with?