Bigger homes making a comeback in U.S.; KB Home says square footage on average 13% higher than last year and buyers increasingly picking 3,500-sq.-ft. models
June 8, 2012
– The shrinking U.S. home may be a recessionary trend that has bottomed out, with bigger homes making a comeback, The Wall Street Journal (WSJ) reported on June 7.
The average size of KB Home houses currently under contract, at 2,079 sq. ft., is up 13% compared with last year, and the homebuilder says increasingly buyers are selecting models that are 3,500 sq. ft. and up.
Census Bureau data shows the average size of a new home in 2011 was 2,480 sq. ft., up 3.7% from 2010 and the first annual increase since 2007, the WSJ reported.
Industry watchers have been surprised at the return to bigger houses, and it’s an encouraging trend for the beleaguered U.S. homebuilding sector.
Steve Ruffner, President of the KB Homes’ Southern California division, said homes are undoubtedly now bigger than a few years ago, although upsizing buyers tend to add practical living space such as an extra bedroom, not expensive upgrades such as massive sunrooms, vaulted ceilings and cavernous entry halls.
Central Pennsylvania homebuilder Charter Homes & Neighborhoods is delivering houses this year that are 200 sq. ft. larger—5%-10%--than those delivered last year. Big sellers this year for Charter Homes are large colonials clustered in park like settings, a spokesperson told the WSJ.
Record-low interest rates--under 4% for a 30-year fixed-rate mortgage—are helping fuel the upsizing trend in enabling some buyers to move up without making significantly larger mortgage payments, according to the WSJ.
Also, because prices of large homes in particular were slashed in recent years, in some communities the price difference between midsize and large homes is small.
Meanwhile, families that have been stuck in too-small homes are also adding to the demand for bigger houses as they gain more confidence the economy is improving, reported the WSJ.
Even high-end builder Toll Brothers said in some developments buyers were bypassing its "smaller" models to favor the larger, more expensive, homes.
The primary source of this article is The Wall Street Journal, via wsj.com, New York, on June 7, 2012.