During the second quarter of 2015, the median size of homes that went under construction was smaller than the size of homes built in the first quarter by 40 square feet. That’s about the size of a walk-in closet, as The Wall Street Journal points out, in this article that takes a look at the potential increasing role of first-time homebuyers in the future of the U.S. housing market.
The median size of U.S. homes built in the second quarter declined from the record set in the previous quarter, suggesting builders are starting to shift toward producing more entry-level homes.
Of the 206,000 homes that went under construction in the second quarter, the median size was 2,479 square feet, according to Commerce Department data released Tuesday. That was 40 square feet smaller than the high set in the first quarter.
The National Association of Home Builders estimates that first-time buyers, who tend to purchase entry-level homes, will account for 18% of new-home sales this year. That is up from 16% last year but still well short of their share of 25% to 27% from 2001 to 2005. Then, quarterly median sizes for new homes ranged from 2,051 to 2,263 square feet.
David Crowe, chief economist for the National Association of Home Builders, foresees a “moderation” of the median size of newly built homes as more first-time buyers come into the market. But he added that it will take a long time for the shift to be reflected in the national median-size figure, because the factors buoying first-time buyers – a loosening of mortgage-qualification standards and growth in jobs and wages – are progressing slowly.
