Design your life to include more money, health and happiness with less stuff, space and energy.

Design your life to include more money, health and happiness with less stuff, space and energy.

Why Are American Homes So Big?

Yesterday, we mentioned that in 2012 the average new single-family home in the US was 2505 sq ft (median house size was 2306 and has stayed close to average. Full stats here). For a small-space blog, maybe we should have devoted a little more attention to this number as it seems relevant to the future of small-space living.


As the above chart shows, after a momentary decrease in size following the housing bubble burst, new homes are close to matching their all time high average of 2521 sq ft in 2007.

What the chart doesn’t show is that the inflated home size is coupled with the persistent shrinking size of the American household. In 2012 the average American household contained a record low 2.55 people–basically 1000 sq ft per occupant of the newly constructed home. Compare that to 40 years ago, when there were 3.01 people per household and the average new home size was 1660 sq ft, or 550 sq ft per occupant.

It should be noted that building production was way down in 2012. In 2007, there were 1.5M new, single-family homes completed. In 2012, that number was 649K.

Prices are up but still down overall. In 2012, the average new, single-family home sold for $292K. That figure peaked in 2007 at $313K. A couple years later, that number sunk to $270K. While this number has steadily increased since the dip, a quick glance makes relative construction costs seem quite low.

This all points to the fact that people build big because they can afford to. With interest rates hovering around 3%, money is very cheap right now for the well-heeled populations who can secure a loan; combine that with cheap construction and energy costs and the financial choice to build big is an easy one for people who already have more money than most. As Lloyd Alter wrote in Treehugger today on this topic, “Money is cheap. Natural gas is cheap. The trades are cheap. What could possibly go wrong?” The only sliver of a silver lining is that it’s fewer, albeit richer, people who are buying these big homes.

This decrease in new single family home construction has not triggered a boom in the construction of units in multifamily buildings. In 2012, there were 166K units completed in multifamily buildings. Compare that to 284K in 2007 or 840K forty years ago.

We wish we had a “but the bright side is” statement, but we don’t. Basically, a smaller subset of the American population is building and buying as big, or bigger, than they ever had. And cities are growing ever denser without a commensurate increase in multifamily building construction, driving prices higher and higher.

What do you think? Outside of a major economic downturn, what would compel Americans to start demanding smaller homes? Will smaller homes always remain a weird niche in the American housing market? Do you think smart design can have a bearing on the emergence of smaller homes? Or will people always choose more when the option presents itself? Please share your thoughts in our comments section.

Contemporary House image via Shutterstock

Screenshot via The Atlantic Cities

  • Gulliver

    The American family in changing — 40% have a female breadwinner. Many are single mothers. The size of houses will change in response to this trend. Also, some women now want to live communally, which demands a residential structure similar to a monastery.

    • di

      Living communally is a great option for a large house.

  • Carol Setters

    My husband and I just moved into a house right under 1000 sq ft. It required a lot of work – we had to get rid of everything from furniture to books in a responsible way so we weren’t just adding to landfill, and as I’m writing, my husband is in his office (also the second bedroom) trying to fit all of his things into one closet. We haven’t even started rearranging the garage since we moved in.
    But that’s the short term deterrent for making this choice. People instinctively know that living smaller means something outside of yourself is limiting your options. Because we allow ourselves to be defined by popular culture, more specifically the marketing business, bucking the trend feels very, very risky. If you even get to the place where you’re thinking about it. Most of us are too busy trying to make enough money to pay for our stuff.

    • Sick_Pleasure

      Yesterday my husband and I, finally empty-nesters happily downsized to a one-bedroom 862 square foot condo. The prospect of a miimalist existence is absolutely libarating!

    • di

      To easily down-size, make a list of what you do want. Then discard the remainder.

  • basicbizdev

    My husband and I are smack in the middle of this, one kid in college one on the way there. We have just relocated to Las Vegas and are looking to buy/build in the next year. It will be my husband, myself and a 12lb dog. We are looking at homes that are 2500 to 3000 sq feet! They are so seductive with all their amenities and there is nothing, here at least in the new market that is even close. The smallest one story home we have seen is 1850 and they are not trying to sell these because the do not add the “pizzaz” design factors the larger homes have. We have no desire to gut and remodel an existing home, we have no desire to do a luxury high rise with enormous monthly fees.

    For me it is a design issue, I want a smaller home, 1,000sq ft would be perfect, but I am not willing to sacrifice beauty and great design to get it. We are not over 55 so we don’t qualify for those communities that traditionally offer a small homes.

    They need to make attractive smaller homes and the people will come.

  • Apinkspirit

    I think the smaller home will become more popular not just for the aging population but for the young. With student loan dept and lack of affordable apartments or homes to rent there is a need for small easy to maintain affordable options. My kids are in their mid to upper twenties and they and all their friends do not intend on having children. They rather spend money on travel or a night life then housing. So I can see this become a very popular option.

  • Tim Domenico

    Huge houses? Why you ask? Looking at the Bill Gates home and Aaron Spellings digs might possibly give you an idea.

    Because it is the great American dream to trade up a few times and end up with 10 times the house you really need. We have a multitude of forest fires right now in Southern Colorado where I live and there is video image after video image of these huge two and three stories homes burning to the ground.

    As long as huge houses have the status they have traditionally encompassed the builders will keep building them and the economic up and comers will continue to buy them.

    It takes a fundamental change of thought to make people realize what a waste these huge homes are.

    Living on three boats and in three different motorhomes has convinced me small is better and ultimately makes me happier.

    See my you tube clip at
    “\n” . youtube_id(“”) . “\n”


  • Ray

    I’ve always been attracted to small living spaces. But, when I talk to others about it they look at me as if I’ve lost my mind. Americans think small homes are low status and I don’t see that changing anytime soon no matter how good it is for the planet.

  • David

    Ultimately, I think it comes down to “how do people judge me?”. There was a time (in my area anyway), when a Hummer was the ultimate mom’s car. It proclaimed that the driver had “that kind of money”. Fast forward to today, and that kind of ridiculous excess is seen more for what it actually is — wasteful and tacky. Which is, in part, why Hummer no longer exists. This shift in thinking may happen in the housing market. But, if it does, I think the change will be very slow.

  • Ani

    I’m in the process of selling my home that is too big with too much land and searching for a smaller condo type. It’s really hard to find a nice affordable small unit. Most of what is on the market here are large homes. I know many other single adults who have been forced to buy a 3-bedroom house just for themselves as they can’t find a decent priced small condo/townhouse. In this area a single-family house often sells for less than a condo or townhouse due in part to their scarcity I would imagine. It sure seems as if there is a market for smaller units. I can only assume that developers are still building what they always have as there is more profit for them to do so, similar to car manufacturers building large SUV’s as their profit margins were so much higher than for small, affordable compact cars.
    I know that in cities such as Boston or NYC this is not the case as land is so pricey and multi-families are common. But out here in the rest of the country, those of us who want a small place we can own are having a rough time finding it.

  • Sky Liberty

    My husband and I currently live in a 3200 square ft. home, just the two of us now that his two daughters have moved out, and we look forward to the day when we can sell this place and buy a motorhome so we can come and go as we please and/or a cabin in the mountains of NH. Unfortunately, we paid more for the home that its current value so we have to hang in there for a while before making our move and going off grid.

  • DWM

    I think its very easy to live minimally, in a very small space, when you are living alone. People who want to start families want big houses, that the american dream, actually that’s probably every cultures dream: to live prosperously.

  • Simone

    I grew up in a very small home, before my older brothers moved out there were 6 of us in our three bedroom house. We were in close quarters and had to put up with each other or go outside; I’m realizing that was such a rarity in the real world. With high stress jobs, surmounting debt and more women in the workforce, I think that big homes are a form of escape for parents nowadays. Everyone has to have their own room so they can watch their own t.v. show or play their video games (go to your room, be preoccupied and quiet so Mom and Dad can relax). Society is becoming numbed to social interaction and it’s all coming from isolation and separation at home. I definitely think the mood is shifting after seeing the extreme repercussions of the ‘live bigger’ lifestyle though. The change is coming and people are getting it. Look at the ‘locavore’ movement, the wave of biking commuters and at home gardens; it’s just that there hasn’t been much emphasis or backing behind the small homes/minimalist movement (but I think it will come with my generation).

    So in a nutshell I think Americans will start demanding small homes with an inevitable change in family values. Smaller homes are going to gain popularity as more people decide not to have children (and with an increase in marketing and common knowledge of smart design). And finally, if the new local movements continue to gain steam, people will start choosing less over more. Sorry about the rant, but this is super interesting to think about…

  • Gregory Samuel Hamilton

    What will it take? A generation or two of kids who grew up in cavernous McMansions surrounded by possessions that they care not for.

  • di

    If a large home is the only option, rent a room or renovate a basement or garage into a small apartment. Live in the small apartment and rent the house.

    Build a smaller house on the same property. Live in the small house and rent the large house.

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  • jlenoconel

    I think rooms in home in the U.S. are too big, and not the amount of rooms. My old house in the UK had the same amount of rooms as my house in the U.S. Everything was just way smaller.

  • kphotog

    We sold our truly special but much too large (idk like
    6500-8000 sq ft!) mansion on the river with breathtaking views in Oct
    2008, moved to a smaller but still large rental home, and after a big
    estate sale we now reside in a 1700 sq ft apt where we couldn’t be
    happier. We live in a suburban community outside a big city that is
    diverse income and other-wise but I can’t tell you how many of my
    affluent friends & acquaintances with big houses expressed jealousy
    & admiration when they found out what we had done. Maybe many of
    them were being polite but others expressed their hope that they too
    would follow in our footsteps once they became empty nesters as we will
    soon be. Among my handful of friends who’ve done the same thing there
    seem to be no regrets whatsoever, and I’d even go so far as to say that
    what we’ve done is seen as “cool” :-). Our next move will be back into
    the city limits closer to our businesses and all the city has to offer.
    We were lucky enough to get the asking price for our huge place right on
    the cusp of the housing market crash; we’re forever grateful for the
    timing (my husband saw real estate trouble on the horizon) and I do not
    miss paying like $750 twice annually for pine straw — insanity!

  • DianaBGKY

    In 1999, well before the housing-market crash, I sold my house in a nearby large city and was ready to buy in the small city where I had already relocated (and was staying with family) and where I currently reside. I called my mortgage company to get pre-approved as I started searching for a home. After all the questions, she said something like, “Let’s see what you qualify for…” I stopped her and said I wanted to ask for a certain amount. In a haughty tone, she said, “Okay.” I gave her a number that was a little less than twice my annual salary. She said, “Yes, that’s fine.” I suspect it was at least half and maybe up to a third of the number she would have given me. I bought a house priced a few thousand below the amount I requested and with the money I had already and after closing costs, I was able to finance 90% of what I asked–and I paid that off in under four years. I never have regretted not knowing the actual amount for which I qualified. Sadly, most people before 2008 let someone else tell them what they could afford as opposed to what they knew they could afford.

  • Right there

    I’m bored with the bulky homes in Arizona. They’re designed to keep you inside the house which is why the backyards are soo tiny. On top of that they all look the same. They’re with brown, tan, or beige in color.

    • Ann Hale

      Boring and lacking in character!

  • Ann Hale

    I think it is an outward manifestation of greed.

  • Anne

    I lived in what I consider a huge house for 6 years. It was the worst place I ever lived because of its size. It was about 3000 sq ft. I spent all of my time walking from one room to the next trying to do normal daily tasks. I was a stay at home mom at the time. The tile floors were terrible For my legs and feet also. To what I just said, someone might bring up the fact that most people work and have maids so the issues I had with a large home would not apply to them. To that I say, why do you need or want a home that big if you are always working and someone else has the fun of being in your home cleaning and cooking for you?
    Don’t people think about all of the wildlife habitat they are taking away by building large new homes? Human beings should spend more time out of doors anyway. Large homes are terrible things unless you have a very large family and large family gatherings. I hope the trend is going towards smaller homes. People don’t need all of that space. Maybe they need such a large house to store all of the unnecessary things they buy.