Builders Constructing Smallest Homes in 15 Years

Washington, DC, April 2, 2025--Data from the U.S. Census Bureau confirm that builders are constructing smaller homes, reports the National Association of Homebuilders (NAHB).

The median home size dropped from 2,200 square feet in 2023 to 2,150 square feet in 2024--the lowest in 15 years--after holding strong at 2,300 square feet from 2019-2022. To increase overall living space, builders are adding porches and patios to the exterior of homes.

Homebuilders are constructing smaller homes partly due to housing affordability concerns. Mortgage rates are expected to remain above 6% throughout 2025, coupled with elevated home prices, creating a significant affordability challenge for first-time buyers and those looking to upgrade.

Given the current housing affordability climate, builders are making some concessions to help families achieve homeownership. According to the latest NAHB/Wells Fargo Housing Market Index, nearly a third (29%) of builders cut home prices in March, up from 26% in February. The average price reduction was 5% in March, the same rate as the previous month. About 59% of builders used sales incentives in March, unchanged from February.

“Homeownership is key to strengthening communities across the country and helps families increase their level of economic prosperity,” said Hughes. “The residential construction industry has solutions to help bring down the cost of housing and is willing to work with all levels of government to solve affordability challenges, so more families have a place to call their own.”