New Homes Are Getting Smaller

Buyer preferences toward smaller, more attainable homes are growing, and builders are taking these preferences into consideration. According to the National Association of Home Builders’ Eye On Housing blog, about 24,000 newly built homes were larger than 5,000 square feet in 2024, representing 2.3% of all housing starts. Both the total number and the share of these extra-large homes declined compared to 2023. In 2023, there were 26,000 housing starts over 5,000 square feet nationwide, but in 2024, that number dropped to 24,000. The construction of homes above 5,000 square feet peaked in 2006 at 45,000 starts before falling sharply during the Great Recession to a low of 11,000 in 2009. Since 2013, however, the annual total has consistently stayed above 20,000 starts, with the most recent high point being 33,000 starts in 2021.

Of the total number of new homes started in 2024, 2.3% had 5,000+ square feet or more of finished space, down from 2.8% in 2023. The decline marks the third consecutive drop in the share of homes this size, down from a recent peak of 2.9% in 2021. In 2015, the 5,000+ square foot share reached a record high of 3.9%. Since then, it has fluctuated between 2.3% and 3.1%.