Builders Are Constructing More Smaller-Sized Homes

July 25, 2017

While it may seem that new single-family home construction leans toward gigantic 3,000-square foot dwellings or trendy 400-square foot tiny homes, builders are recognizing there’s demand for a middle ground.

According to the Harvard Joint Center for Housing Studies, new completions for homes under 1,800 square feet rose 20 percent in 2016 to 163,000 units. It was the first significant growth in the segment since 2004.

Homes of this size are ideal for first-time buyers. After the recession, though, many builders shifted away from smaller homes, instead choosing to focus on more profitable luxury homes.

Even with the uptick in 2016, though, small-home construction remains 65 percent below the 464,000 units completed annually between 1999 and 2006, and comprises a much smaller share of newly-built housing than in the past.

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