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Bigger Houses, Smaller Households: What Gives?
Bigger Houses, Smaller Households: What Gives?
It sounds backward, but it’s true: over the past few decades, homes have gotten significantly larger while household sizes have gotten smaller.
According to USA Facts and Census.gov, the average square footage of a new single-family home in the U.S. has increased from about 2,000 square feet in the 1990s to more than 2,500 square feet today. Meanwhile, the average household size has decreased due to fewer children per family and more people living alone or delaying marriage.
So why the size boost? A few reasons:
The open floor plan trend increased demand for bigger communal spaces.
More people started working from home and needed dedicated office areas.
Builders focused on higher-end homes with more features and square footage due to higher profit margins.
And culturally, we’ve equated square footage with success. “Bigger is better” has been a deeply ingrained message in homebuying for decades.
But here’s where things get complicated: As more people struggle to enter the housing market, we’re seeing a growing need for smaller, more affordable homes, especially starter homes under 1,000 square feet.
In the 1940s and '50s, these compact homes were the norm. A modest two-bedroom bungalow or ranch-style home could provide just enough space for a small family to live comfortably, build equity, and take that first step toward the American Dream. Today, homes that size have all but vanished from new construction.
Why? A few key factors:
Zoning laws often require minimum lot sizes and restrict multi-unit or smaller home development.
Builder economics favor larger, more expensive homes that yield better profit margins.
Buyer expectations have shifted. We've been marketed “more” as the standard: more bedrooms, more bathrooms, more garage stalls—even if they’re not truly needed.
But bigger isn’t always better, especially when it pushes affordability out of reach. Many first-time buyers don’t need 2,500 square feet. They need an affordable, efficient, and livable home that gives them a chance to build wealth and stability.
So how do we shift the conversation?
We start by normalizing the idea of “right-sizing.” Not everyone needs or wants a big house. Smaller homes can be:
Easier to maintain and clean
More energy-efficient
Less expensive to heat, cool, and furnish
More conducive to community-centered design
Builders are starting to respond to this need, especially in urban infill areas or where ADUs (accessory dwelling units) and tiny homes are allowed. But for this shift to take hold, buyers also need to reframe what success looks like. A 950-square-foot home with thoughtful design might be the perfect fit and a smart investment for someone starting out or downsizing.
As families blend generations under one roof, smart design becomes even more essential. Open-concept layouts, flexible-use rooms, multi-purpose furniture, and separate entries for added privacy can make even small homes feel larger and more livable.
If we want to address affordability and accessibility, we need more variety in the housing market. That includes compact, well-designed homes that prioritize function over footage like we used to build.
Coming up next: First-Time Buyer Survival Guide: Navigating Today’s Market.
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