After a brief surge in new home sizes during 2021, the average size of new homes is continuing to slowly decrease. Data reveals the average size dipped from 2,479 square feet to 2,411 square feet 2022 to 2023, marking the smallest average size observed in 13 years.
This shift aligns with the evolving preferences of homebuyers, who are increasingly opting for smaller square footage. The latest study by the National Association of Home Builders, titled “What Home Buyers Really Want,” states the desired size for homes now hovers around 2,070 square feet, down from 2,260 square feet two decades ago.
Rose Quint, assistant vice president of survey research at the NAHB, attributes this trend to two interconnected reasons. “First, we’ve seen changes in homebuyer preferences. Second, housing affordability has worsened in recent years,” she explains.
Builders are actively responding to this shift in demand. In 2023, 38% of builders reported constructing smaller homes to align with market preferences and support sales. Looking ahead to 2024, 26% of builders plan to further reduce home sizes.
Additionally, builders are addressing affordability concerns by slashing home prices, offering sales incentives and introducing more budget-friendly options for finishes. The median price of new homes fell to $427,400 in 2023, marking a notable 7-percentage-point decrease from 2022 – a decline not witnessed since 2009.
Conversely, existing home prices continued to climb, reaching $394,600, indicating a 1% increase from the previous year.
Home buyers are not only redefining their size preferences but also rethinking their overall design priorities, placing greater emphasis on personalization and authenticity. This inclination toward customization is evident in the choice of home style and upgrades such as premium quality cabinets and built-ins, customized kitchen islands and upscale flooring.
Certain home features remain highly coveted among buyers, including more outdoor features, kitchen features and two related to energy efficiency:
Laundry room
Patio
Energy Star windows
Outdoor lighting
Ceiling fans
Custom garage storage
Front porch
Hardwood flooring
Main level full bath
Energy Star appliances
Walk-in pantry
Landscaping
Dining space in the kitchen
Moreover, technology-driven amenities are gaining popularity, with security cameras, wired home security systems, programmable thermostats, video doorbells, multi zone HVAC systems, and energy management systems topping the list.
For the latest news on home trends and tips to help with your new home purchase, visit the Home Builders Association of Greater Chattanooga’s website at hbagc.net.