“Home sizes increased from 2009 to 2015 due to restrictions on new entry-level homes, but home sizes have decreased since 2016 as more starter homes have been built,” said NAHB chief economist Robert Dietz. “In the future, we expect home size to increase again, given the shift in consumer preferences for more space due to the increased use and role of homes (for work, for study) in the post-COVID-19 environment.”
Smaller homes were more accessible to new buyers from previous generations. According to Freddie Mack, in the late 1970s, an average of 418,000 new entry-level homes were being built per year. By the 2010s, that figure had dropped to 55,000 new units per year, and in 2020, only 65,000 entry-level homes were completed.
“As we move through the year and move beyond the pandemic, we expect housing shortages to continue to be one of the biggest obstacles to inclusive US growth. Simply put, we must build more entry-level single-family housing to address this challenge, which has profound implications for the well-being, health and stability of American communities, ”said Sam Hather, chief economist and head of economic and housing research at Freddie Mac. Block.