Friday, January 23, 2015

New homes are downsizing to keep a lid on costs

The average new home built in the U.S. last year was about 20 square feet smaller than in 2013.
“After rising for four consecutive years, it began to recede in 2014,” said Rose Quint, a researcher with the National Association of Home Builders. “It went down to 2,642 square feet.
“I think the average home size will likely continue to recede in 2015,” Quint said at the builders association’s annual show in Las Vegas.
New homes on average are still about 25 percent larger than they were in the mid-1990s. And for a few years it looked like the American home would continue to be plus size, with more bedrooms, garages, media rooms and the like.
Quint said market factors are now putting a ceiling on home size growth.
In recent years most of the houses built across the country have been designed for more affluent, repeat buyers.
As young, first-time homebuyers come back to the market, average new house sizes will decline, she said.
“We are going to have more young people — first-time buyers — entering the housing market in 2015,” Quint said. “They are going to want smaller homes that cost less money.”
Those younger buyers say they are not interested in pricey features like outdoor kitchens, media rooms and fireplaces.
Dallas-Fort Worth homes have already seen big increases in size and price.
“From 2010 to 2014, the median new home price in D-FW has climbed from $213,000 to $285,000, an increase of almost 34 percent,” said Ted Wilson of Residential Strategies Inc. “During the first part of the D-FW housing recovery, as mortgage rates declined, very clearly buyers were purchasing more expensive homes with larger square footages.”
Higher construction and land prices have been putting pressure on the cost of a new home in North Texas, Wilson said. “As a result, the square footages are flat to down.”
Steve Brown - Dallas Morning News