Preliminary data provided to NAHB by the Census Bureau on
the characteristics of homes started in 2013 show the trend toward larger
homes continued unabated last year, as did the share of new homes with 4+
bedrooms, 3+ full baths, 2-stories, or 3-car garages. The average
size of new homes started in 2013[1] was 2,679 square feet, about 150
square feet larger than in 2012 and the fourth consecutive annual increase
since bottoming out at 2,362 square feet in 2009.
 New homes started
in 2013 were also more likely to have additional features: nearly half,
48%, had 4 or more bedrooms; 35% had 3 or more full bathrooms; 22% had a
garage for at least 3 cars; and 60% were 2-stories. The share of new
homes started with these features has been increasing consistently for 3 or
4 years, and the most obvious question is “why?” Why are homes getting this
BIG?
 To get an answer,
just take a look at WHO is buying new homes? The typical new home
buyer in recent years has been someone with strong credit scores and high
levels of income. To the first point, the graph below shows how the
average credit rating of all US consumers has remained rather flat over the
last few years (blue line), while the average credit rating of mortgage
borrowers (red line) took a dramatic jump after 2007. By 2013, the
gap between the two measures was 58 points, compared to 33 points in the
early 2000s.
To the second point, the graph below shows the rising trend
in new home buyers’ income in recent years. In 2005, the median
income of new home buyers was $91,768. By 2011, it had increased by
more than 17% to $107,607. It is not too surprising, therefore, to
see home size and features continuing to trend upward, given that those
buying new homes are precisely the kind of buyers who generally purchase
large, feature-loaded homes.
[1]
Preliminary data cover first half of the year.
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