Does size really matter?
By: J. David Chapman/November 8, 2018
How many square feet do you need or desire in your home? What is the smallest home in which your family would feel comfortable living?
In 1973, the average American family lived in a 1,660-square-foot home. Today, according to the Census Bureau’s Characteristics of New Housing annual report, the average home built was 2,660 square feet. At the same time, the average family size has declined to an all-time low at 2.54 people per household, versus 3.01 in 1973. This is a 92 percent spike in square footage per person.
The 2,660 square feet is actually lower than the 2,740 recorded in 2015. Could this be the start of a trend in smaller square-foot homes? A new survey performed by the National Association of Home Builders finds that more than half of Americans would consider living in a home that’s less than 600 square feet. Among millennials, the interest increases to 63 percent.
I have been a proponent of small auxiliary dwelling units sometimes called “granny flats” or “garage apartments” for income production for homeowners and as a good source of affordable rental housing. They are normally 400 to 800 square feet. While I can appreciate college students and single adults living in those square footages, I have doubts whether most families would be happy or comfortable in the 600-square-foot home once they acquire it. Fun to talk about and watch on HGTV, but reality might set in once it is occupied.
I think that the reduction in average square footage in the last several years, although small, is a good sign that homebuilders are listening. They should not ignore their association’s survey of millennials who clearly see a benefit from living in smaller square foot homes.
Considering the downsizing that is going to take place in the next decade with older Americans, homebuilders would benefit from learning lessons on how to build smaller square foot homes profitably. The challenge of putting the amenities in a home that buyers demand with less square footage to spread those costs is the age-old dilemma. It is simply easier to build the amenities into the larger home.
Are Americans ready to live in tiny homes? I doubt it. Are Americans going to live in smaller homes in the future? I believe so.
J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu).