Size of starter homes is shrinking

The median size of a new single-family home in the U.S. shrunk to 2,150 sf in 2024, according to The State of the Nation’s Housing, an annual report recently released by Harvard University’s Joint Center for Housing Studies.

It’s a significant decline from nearly 2,500 sf in 2013, and close to the roughly 2,100 sf average seen in 2009 during the global financial crisis. Buyers are willing to buy slightly smaller homes to afford them and builders are obliging them.

Since 2019, average home prices have risen more than 60%. Historically, the cost of new homes tended to be more expensive than existing homes, but the premium paid for new homes is shrinking. In the 2010s, the typical new single-family home was about $66,000 more expensive than the median sales price of an existing home. In 2024, that gap shrank to about $8,000.

Builders are also bringing more new townhomes to market. The report found that in 2024, builders started 176,000 townhomes, a 59% increase from 2019.