Less for More: New-Home Sizes Have Decreased Slightly Nationwide, While Prices Per Square Foot Have Jumped 95%
Though they’ve come down somewhat from their pandemic highs, home prices are still steep, especially compared to 10 years earlier.
While some of the extra money people are spending on housing may go to newer amenities that weren’t as common in years past — like passive-aggressive refrigerators that remind you to eat your vegetables or security cameras that definitely aren’t spying on you — one place where their dough doesn’t seem to be going is toward size.
On the contrary: While new homes cost considerably more per square foot than in 2012, they haven’t gotten any bigger — at least not nationally. In fact, according to a LendingTree analysis of U.S. Census Bureau Characteristics of New Housing data, homes in the U.S. have shrunk slightly since 2012, while average prices per square foot have nearly doubled.
Key findings
- The average square footage of new single-family houses sold in the U.S. decreased by 1.0% from 2012 to 2022. Regionally, average square footage shrunk by 3.3% and 2.0% in the South and Midwest, but it increased by 8.0% and 1.6% in the Northeast and West.
- Though homes may be getting smaller in some areas, the average square footage for a new house sold in the U.S. is anything but tiny, at 2,559 square feet. Homes tend to be a bit smaller than the national average in the West and Midwest, where they’re an average of 2,477 and 2,397 square feet, respectively. On the flip side, the average square footage of homes in the Northeast (2,756 square feet) and South (2,608 square feet) is bigger than the national average.
- Homes out West are the most expensive per square foot, where a new house will cost an average of $217.11 per square foot. Cost per square foot is the second-highest in the Northeast at $212.18, while the Midwest and South are the most cost-effective at $159.11 and $155.10 per square foot. Nationwide, buyers can expect to spend an average of $168.35 per square foot.
- The average price per square foot of a new house grew significantly from 2012 to 2022, increasing by 95.1% nationally. From 2012 to 2022, the price per square foot increased by 124.4% in the West, 97.7% in the South, 76.3% in the Midwest and 73.1% in the Northeast.
- Though recently built homes may tend to be slightly smaller than new homes 10 years earlier, they’re still notably larger than those built in the early 1990s and 2000s. For example, the average square footage for new homes sold in the U.S. increased by 11.2% from 2002 to 2022 and 24.2% from 1992 to 2022. That said, the average price per square foot more than tripled from 1992 to 2022, so buyers of yesteryear tended to get more out of their money, even if their homes were smaller.
National and regional average square footage and price per square foot for new homes sold
U.S.
- Average square footage of new single-family homes sold in 2022: 2,559 sq. ft.
- Average price per square foot of new single-family homes sold in 2022: $168.35
- % increase in average square footage from 2012 to 2022: -1.0%
- % increase in average price per square foot from 2012 to 2022: 95.1%
- % increase in average square footage from 2002 to 2022: 11.2%
- % increase in average price per square foot from 2002 to 2022: 122.4%
- % increase in average square footage from 1992 to 2022: 24.2%
- % increase in average price per square foot from 1992 to 2022: 205.1%
Northeast
- Average square footage of new single-family homes sold in 2022: 2,756 sq. ft.
- Average price per square foot of new single-family homes sold in 2022: $212.18
- % increase in average square footage from 2012 to 2022: 8.0%
- % increase in average price per square foot from 2012 to 2022: 73.1%
- % increase in average square footage from 2002 to 2022: 10.8%
- % increase in average price per square foot from 2002 to 2022: 139.5%
- % increase in average square footage from 1992 to 2022: 31.2%
- % increase in average price per square foot from 1992 to 2022: 219.3%
South
- Average square footage of new single-family homes sold in 2022: 2,608 sq. ft.
- Average price per square foot of new single-family homes sold in 2022: $155.10
- % increase in average square footage from 2012 to 2022: -3.3%
- % increase in average price per square foot from 2012 to 2022: 97.7%
- % increase in average square footage from 2002 to 2022: 12.2%
- % increase in average price per square foot from 2002 to 2022: 136.6%
- % increase in average square footage from 1992 to 2022: 23.0%
- % increase in average price per square foot from 1992 to 2022: 219.9%
West
- Average square footage of new single-family homes sold in 2022: 2,477 sq. ft.
- Average price per square foot of new single-family homes sold in 2022: $217.11
- % increase in average square footage from 2012 to 2022: 1.6%
- % increase in average price per square foot from 2012 to 2022: 124.4%
- % increase in average square footage from 2002 to 2022: 6.2%
- % increase in average price per square foot from 2002 to 2022: 143.1%
- % increase in average square footage from 1992 to 2022: 23.9%
- % increase in average price per square foot from 1992 to 2022: 252.2%
Midwest
- Average square footage of new single-family homes sold in 2022: 2,397 sq. ft.
- Average price per square foot of new single-family homes sold in 2022: $159.11
- % increase in average square footage from 2012 to 2022: -2.0%
- % increase in average price per square foot from 2012 to 2022: 76.3%
- % increase in average square footage from 2002 to 2022: 12.4%
- % increase in average price per square foot from 2002 to 2022: 104.1%
- % increase in average square footage from 1992 to 2022: 21.7%
- % increase in average price per square foot from 1992 to 2022: 166.7%
Why homes have increased in price but decreased in size
Distressing as it may be, the data indicates that homes have gotten smaller, even as prices have risen — at least nationally. While this may not be great for people interested in getting the most bang for their buck when buying a home, there are various reasons why it’s happening.
For example, increased raw material costs and labor scarcity issues during the pandemic made it considerably more expensive and challenging for builders to construct homes. As the cost of building rose, so did the costs passed on to homebuyers. Unfortunately, even as raw material prices and the labor market have improved since the height of the pandemic, they still present problems to many builders, and costs have remained steep.
In addition, overly strict zoning laws contribute to increasing costs — especially in big cities. Even when labor and raw materials are easy to come by or a company can afford to pay cash for everything it needs, construction can still be extremely expensive for those who have to pay a premium on land or jump through red tape to break ground.
Of course, this doesn’t mean the U.S. is running out of space to build homes or that all zoning laws are bad. Similarly, it doesn’t mean that today’s high interest rates aren’t largely justified to fight inflation, or that construction workers don’t have a right to a fair wage for their labor.
Nonetheless, it’s clear that building a home is often anything but cheap, and that finding a place to construct a large house can be challenging.
Tips for buying in today’s expensive housing market
Even if your money doesn’t get you as much room as you’d like, buying a home without bankrupting yourself is still possible — even in today’s expensive housing market. Here are three tips on how to do that:
- Shop around for a mortgage before you buy. Different mortgage lenders generally don’t offer identical rates to the same borrowers. Owing to this, some homebuyers can get a lower rate on their loan by shopping around and comparing offers from different mortgage lenders before they buy. The lower the rate you get, the more affordable your housing costs are likely to be.
- Consider different loan options. Conventional mortgages are the most common type of home loan, but they aren’t the only one borrowers can get. Instead, mortgages backed by government agencies like the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) are also available. Though not everyone will qualify for these types of mortgages, those who do may find them easier to get approved for, especially if they have less-than-stellar credit or lack funds for a large down payment.
- Don’t break your budget to try to afford an extra few hundred square feet. A big house may seem nice, but it probably won’t be worth it if buying one comes at the cost of your financial security. Those who overspend on a home can end up housing cost-burdened and without enough cash to cover other necessary expenses like grocery bills or car payments. At the end of the day, owning a small but reasonably priced home will probably be better than owning a big house you struggle to afford.
Methodology
Data in this study is from the U.S. Census Bureau’s latest Characteristics of New Housing dataset released in June 2023 and contains data for 2022 and before.
LendingTree used this dataset to look at average square footage and average price per square foot for new single-family housing units sold to buyers in the U.S. and each of the nation’s four main regions: Northeast, Midwest, South and West.
The states included in each region are as follows:
- Northeast: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.
- Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
- South: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.
- West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
Correction: This page was updated Aug. 15, 2023, to update the average square footage of new single-family homes sold in 2022 and the average price per square foot of new single-family homes sold in 2022 in the U.S. and its four regions.