Starter homes are continuing to get smaller.
The median size of a new single-family home in the United States fell in 2024 for a third year in a row, dropping to 2,150 square feet, according to a newly released report on the state of housing nationwide from the Joint Center for Housing Studies of Harvard University.
The center found home sizes shrank again last year in response to high costs and affordability pressures. What were described as “competitive adjustments” helped new builds reach the largest share of all home sales since 2005 at 16%.
The reduced size of a brand-new house is “down from nearly 2,500 square feet back in 2013, and startlingly close to the roughly 2,100 square foot average seen in 2009 at the depth of the global financial crisis,” Fast Company reported.
The business news outlet said in a post that this is “a downsizing that underscores just how hard it is for most people to afford to buy a home today, and the extent to which homebuilders are adjusting their offerings to meet demand.”
Daniel McCue, a senior research associate at the Joint Center for Housing Studies, told Fast Company the changing square footage showcases the demand for lower-cost housing.
“Buyers look like they’re willing to buy slightly smaller homes in order to be able to afford them, given that prices have risen so high over the past three, four, five years, and interest rates remain relatively high as well,” McCue said.
Smaller detached houses aren’t the only option to keep prices down, the center’s report noted.
There’s been “an enormous increase in the construction of townhomes, a housing type typically smaller than a detached single-family home,” the researchers found, with builders starting on 176,000 townhomes in 2024, a 59% increase over 2019.
The increase in townhome construction is “one example of the way in which buyers and builders are focusing on products that are relatively more affordable, given the affordability constraints,” McCue said.
In Utah, state leaders are looking to a different type of affordable housing for first-time buyers.
“Starter condos” are seen as a way to meet Gov. Spencer Cox’s goal of building 35,000 starter homes by 2028. State officials are working to address the costly and complicated regulatory and insurance issues that have long stalled low-priced condo projects across the country.
Last session, lawmakers quietly made a change to the administration of the $300 million in public funds set aside for loans to starter home developers. The change was intended to bypass federal limitations on the availability of the FHA loans often used by first-time homebuyers.