The average size of a new home is still decreasing, falling from 2,479 square feet in 2022 to 2,411 square feet in 2023, according to a new report from the National Association of Home Builders (NAHB). This represents the smallest average size in 13 years after a slight rise in new home sizes in 2021.
This trend is in line with homebuyer preferences for less square footage. According to the latest What Home Buyers Really Want report by NAHB, buyers are looking for homes that are typically 2,070 square feet, as opposed to 2,260 square feet two decades ago.
“It’s related to two factors that are linked,” said Rose Quint, Assistant VP of Survey Research for NAHB. “First, we’ve seen changes in home buyer preferences. Second, housing affordability has worsened in recent years.”
In response to this trend, builders are building smaller homes. Some 38% reported they did so in 2023 to boost home sales, and 26% said they intend to do so in 2024. Additionally, they are attempting to close the affordability gap in housing by lowering the cost of homes, offering incentives for sales, and introducing more reasonably priced finishes.
While existing home prices continued to rise to $394,600, a percentage point increase over the previous year, the median price of new homes fell to $427,400 in 2023, down 7 percentage points from 2022 and a dip not seen since 2009. Homebuyers are not only shifting their preferences on size; they’re shifting their overall design preferences as well, placing higher value on personalization and authenticity.
Home features that remain at the top of buyers’ wish list include four outdoor features, kitchen features and features related to energy efficiency.
Home Features on Buyers’ Wish Lists
- Laundry room
- Patio
- Energy Star window
- Exterior lighting
- Ceiling fan
- Garage storage
- Front porch
- Hardwood flooring
- Full bath on the main level
- Energy Star appliances
- Walk-in pantry
- Landscaping
- Table space in the kitchen
Security cameras, wired home security systems, programmable thermostats, video doorbells, multizone HVAC systems, and energy management systems are also among the technological elements that are growing in popularity.
Home Features Growing in Popularity Over the Past Decade Include:
- Quartz or engineered stone for kitchen countertops
- Lighting control systems
- Outdoor fireplaces
- Outdoor kitchens
- Built-in kitchen seating
- Exposed beams
“Our home owners are looking to personalize their homes,” said Donald Ruthroff, AIA, Founding Principal at Design Story Spaces. “They want to it feel like it was made just for them and be significantly different than their neighbors’ homes.”
This can be seen in the design of the house as well as the additions that homebuyers decide to make, such as building an island that resembles furniture, better cabinetry, or more costly flooring.
To read the full report, including more data, charts, and methodology, click here.
