Americans’ waistlines aren’t the only things expanding. Their houses are, too.
New census data show that McMansions are back — or at least never really went away. The median size of newly built single-family homes reached nearly 2,500 square feet in 2015, its highest level on record. Four decades ago, the median newly built house was less than two-thirds that size.
As you can see, there was a slight dip in median home size immediately after the housing bust, but then square footage expanded again from 2010 onward.
The typical number of bedrooms has gone up, too, with new homes most often having at least four bedrooms.
What explains the growing size of American homes?
There are a few likely factors besides just changing tastes.
For one, low- and middle-income Americans haven’t seen their wages rise much and are still dealing with credit scars from the Great Recession (and recent housing bust). So it may disproportionately be high-income families that are actually in the market for buying houses, especially new construction.
There are possible supply-side explanations as well.
In recent months, homebuilders have complained about the availability of lots; higher permitting and development costs (perhaps because local policymakers are looking for more sources of revenue other than taxes?); and labor shortages.
Those labor shortages may be partly driven by net outflows in Mexican immigration; immigrants (though not all necessarily Mexican-born immigrants) represent about a quarter of the construction labor force. Domestic pipeline issues may be contributing as well. Boomers are retiring, and some of the skilled construction trades they practice require several years of education, training, apprenticeships, etc. Few young workers, however, likely opted to enter that training pipeline several years ago, when the housing market looked so bleak.
All these factors are probably driving up costs for builders and developers, which could nudge them toward higher-margin, bigger-footprint opportunities.
I should note, by the way, that trends look different for multifamily units.