As Home Prices Climb, New Homes Are Getting Smaller
Material and land costs are getting more costly, and because of that, the housing industry is prioritizing smaller houses that get buyers in the door. According to a report from online lending platform LendingTree, the average size of new single-family homes sold nationwide declined by 11.6% over the past decade while the average price per square foot grew by 71.9% during the same period.
Smaller homes can provide a more accessible entry point for buyers, but smaller doesn’t automatically mean affordable. A lower total price may reduce the down payment and monthly mortgage payment, but buyers may still pay a lot more for every square foot of living space.
- Matt Schulz, LendingTree chief consumer finance analyst
Smaller homes are a better entry point for most buyers
From 2015 to 2025, the average size of new single-family homes declined from 2,724 square feet to 2,409 square feet. Additionally, in 2025, one in four new single-family homes sold measured less than 1,800 square feet, up from just 16% in 2015. At the same time, the share of larger homes measuring at least 3,000 square feet fell from 33% to 20%.
Some regions of the US are seeing sharper declines in square footage than others
Because of land constraints and elevated building costs, some areas of the market are seeing steeper declines in square footage. The Northeast is the only area to see the average new-home size grow, doing so by 1.1% over the past decade. Meanwhile, homes in the South shrunk by 13.4%, followed by the Midwest at 12.2%, and the West at 9.2%.
About the Author
Catherine Sweeney, Content Strategist/Staff Writer
Catherine Sweeney is a content strategist and staff writer for Pro Builder and Custom Builder Online, with a focus on design trends, new products, and environmental issues. Contact her at csweeney@endeavorb2b.com.