Big Homes Make A Surprise Comeback
Big Homes Make A Surprise Comeback, The average square footage of new houses in the U.S. is rising once again. Jamie and Ashley Mengle spent the past four years in a 1,920-square-foot, three-bedroom town house. In July, they will upgrade to a 3,200-square-foot single-family home with four bedrooms here in this suburb of Harrisburg.
The Mengles are at the forefront of a surprising trend in a number of new subdivisions across the nation: Bigger homes are making a comeback.
“There’s no doubt we’re a lot larger than we were a few years ago,” said Steve Ruffner, president of the Southern California division of KB Home, one of the nation’s largest builders.
KB Home says the average square footage of houses currently under contract is 2,079, an increase of 13% from last year. And more KB buyers are picking models that exceed 3,500 square feet.
That is a change from the past few years, when builders were downsizing houses to accommodate an era of frugality and austerity. As the economy slowly improves and some consumers’ anxieties ease, buyers are upsizing again-though there is far less demand than before for huge houses loaded with upgrades.
According to the Census Bureau, the average size of a newly built home was 2,480 square feet in 2011. That was up 3.7% from 2010 and represented the first annual increase since 2007.
Charter Homes & Neighborhoods, the company that is building the Mengles’ new house, said the single-family homes it is delivering this year are 200 square feet larger than the ones they delivered last year, which works out to an increase of 5% to 10%. “The big sellers last year were town homes,” said a company representative. This year, she said, the hot sellers are large colonials clustered in parklike settings.
With the trend, some builders are seeing increased sales prices. In April, the average home price was $282,600, up from $268,900 a year earlier, according to census data, though that is down from $329,400 in early 2007.
In its first quarter, KB Home saw its average selling price rise 6% from a year earlier to $219,000.
The return to bigger houses-which has taken industry watchers by surprise-indicates that the housing downturn paused, but didn’t kill, America’s love affair with supersize abodes. The trend is an encouraging sign for builders, which last year sold just 306,000 newly built homes, the lowest number since record-keeping began in 1963.
A major driver behind the bigger-home trend is record-low interest rates, under 4% for a 30-year fixed-rate mortgage, which allow some buyers to move up without necessarily making larger mortgage payments.