Big is better, at least when it comes to new homes.
That is to say, the median size of newly constructed houses has crept steadily higher since the market crash, to a point where now that the Census Bureau's latest survey finds it at a record 2,315 square feet.
Consequently, the trend toward smaller houses, which began with the market downturn, has reversed itself.
If this pattern seems familiar, it should. There was a temporary lull in the advent of ever-growing houses in the early 1980s, and it was "coincident" with an economic downturn followed by a recovery.
Back then, "many experts thought that the decline in the 2000s was due to factors that would prove to be more permanent, such as desire to keep energy costs down," says Paul Emrath, an economist with the
Emrath believes that the trend toward larger places is driven, at least in part, by what he calls "an atypical mix" of higher-income buyers who can afford more house. Since 2010, he notes, tight credit conditions have squeezed many first-time buyers and other marginal customers out of the market.
In 2009, the size of new homes had plummeted to a median of 2,100 square feet.
Because buyers are going for larger houses again, the median sales price also is up, from $211,000 in 2008, according to the Census Bureau's Survey of Construction, to $245,000 last year.
So where is the increased square footage going? One place is the water closet. Since 2009, the average number of bathrooms in new homes has risen steadily to a new high of 2.56. And as of 2012, the average number of bedrooms stands at 3.38.
A larger number of homes—no pun intended—also were built last year with basements (30.2%) and three-car garages (19.7%).
Only 11% were purchased with cash, though, a slight decline from 12.3% in 2011.
Conventional loans were by far the most prevalent type of financing last year used by buyers of new homes, accounting for 58.6% of all mortgages. Nearly 16% used FHA-insured loans to buy a new home, and 7.9% used loans backed by the Veterans Administration.
Lew Sichelman is an independent journalist who has been covering the housing and mortgage markets for more than 40 years.
