New single-family home size increased slightly at the start of 2019, as the market slowed.
According to first quarter 2019 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area ticked up to 2,355 square feet. Average (mean) square footage for new single-family homes increased to 2,584 square feet.
On a less volatile one-year moving average, the recent trend of declines in new home size can be seen on the graph above, although current readings remain elevated. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 8% higher at 2,551 square feet, while the median size is 11% higher at 2,335 square feet.
The post-recession increase in single-family home size was consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions. This pattern was exacerbated during the current business cycle due to market weakness among first-time homebuyers and supply-side constraints in the building market. But current declines in size indicate that this part of the cycle has ended, and size will trend lower as builders add more entry-level homes into inventory and the custom market levels off.
In contrast to single-family patterns, new multifamily apartment size is down compared to the pre-recession period. This is due to the weak for-sale multifamily market and strength for rental demand.
According to NAHB’s Remodeling Market Index (RMI) survey for the 4th quarter of 2018, over three-fourths of professional remodelers undertake projects designed to allow home owners to Age-in-Place.
Their customers are generally familiar with the Aging-in-Place concept, and at least somewhat receptive to it. However, in practice, remodelers continue to perform Aging-in-Place work mostly for customers age 55 or older, although there has been a modest uptick in work undertaken for homeowners age 35 to 54 in the past couple of years
The RMI survey has asked questions about Aging-in-Place periodically, beginning in 2004. Initially, about three-fifths of remodelers reported Aging-in-Place home modifications. The percentage increased over the years, reaching a peak of 80 percent in 2016. Although the percentage declined slightly in the 2018 survey, 77 percent of remodelers are still reporting Aging-in-Place work, the second highest Aging-in-Place percentage on record since NAHB began collecting the information.
When asked, a clear majority of remodelers say that some of their customers are familiar with the Aging-in-Place concept. The percentage has fluctuated between 68 and 77 percent, and stood at 72 percent in the last two surveys. However, the share of remodelers who say none of their customers are familiar with Aging-in-Place has dwindled from 25 percent in 2004 down to 11 percent in the last two surveys. Meanwhile, the share who say most of their customers are familiar with Aging-in-Place has tripled, from only 6 percent in 2004 to a high of 18 percent in 2018.
In 2006, the survey expanded to include a question on how receptive remodelers’ customers are to Aging-in-Place home modifications. Although the largest share consistently goes to those reporting their customers are somewhat receptive, the share reporting that they are very receptive is nearly as large. In the latest, 2018 survey, the shares were 54 percent somewhat and 45 percent very receptive. The share of remodelers who say home owners are not at all receptive to Aging-in-Place, which has been consistently small, fell to a near negligible 1 percent in 2018.
Over the years, roughly 60 to 75 percent of remodelers have reported Aging-in-Place work for customers in both the 55-to-64 and 65-plus age groups. Aging-in-Place work undertaken for younger customers, meanwhile, has been less common. In fact, the share of remodelers reporting work for customers age 45-to-54 declined from 43 to 22 percent between 2006 (the later stages of the housing market boom) and 2013. Over the same period, the age 35-to-44 share declined from 17 to 6 percent. Since 2016 there has been a modest recovery in Aging-in-Place remodeling for home owners in the 35-to-44 and 45-to-54 age brackets, with the shares rising to 10 and 27 percent, respectively, by the end of 2018.
On Friday of next week, Eye on Housing will report on specific Aging-in-Place remodeling projects, as well as the reasons home owners undertake them.
Older Americans largely prefer to stay in their current homes as they age rather than downsize or relocate