New homes will continue to get smaller, according to new survey

As home sizes shrink, hallways are on the chopping block.

That's according to a new report out this month from John Burns Research and Consulting, which looks at how the architecture of new housing stock in the U.S. is expected to shift in the coming years. 

Mikaela Arroyo, one of the researchers, said that based on the types of homes architects said they are designing, consumers can expect homes to continue to get smaller and their layouts more compact. That's on par with findings from other surveys the consulting firm has conducted in recent years.

This complicates the design process for architects who have to figure out how to do more with less. The question, said Arroyo, becomes, "How is the designer going to combine spaces, maybe into a flex space, or eliminate unused spaces, and make everything fit into a smaller package?"

Last year, about 25% of floor plans designed by architects were downsized to cut costs, according to John Burns. 

Construction spending has soared over the years, and home prices are in record territory. According to Realtor.com, while the median price of homes for sale hasn't fluctuated much since last year, the median price per square foot jumped by 3.4%, suggesting the share of smaller homes is growing. 

The median size for a new single-family home sold in 2023 was 2,286 square feet — down from 2,328 square feet in 2022, according to the U.S. Census Bureau. The census data indicates that the median size for single-family homes has been shrinking since 2014, when it reached a peak of 2,526 square feet.

Say farewell to hallways?

As homes shrink in size, hallways could be one of the first casualties. Eliminating these liminal spaces would decrease the number of interior walls and allow for more condensed homes, the survey found. 

"Essentially, we're Tetris-ing the functional rooms together, avoiding wasted square footage on non-functional areas like hallways," the report said.

Other tactics Arroyo has noticed designers employing to save on space include eliminating a formal dining room, adding storage in unused spaces (under the staircase, for example), three-story homes with the living space on the second floor, and tandem garages. 

The survey also found that more homes will have some sort of "flex space" — rooms that can serve multiple functions, like a playroom or office. Over half new homes built last year included some sort of flex space, according to John Burns.

"A more attainable price point"

While homebuyers will have to contend with tighter spaces, the shrunk-down home sizes could ease the burden on their bank accounts.

Those looking to buy face a tough housing market, with mortgage rates hovering at 7% and record high homes prices. A recent report from real estate analytics firm ATTOM found that homes are unaffordable in 80% of U.S. counties.

Smaller homes could help.

"The increase in budget-friendly homes priced in the $200,000 to $350,000 range outpaced all other price categories for the past five months," wrote Julie Taylor in an article from Realtor.com. "That means buyers have way more homes to choose from at a friendly price range at a time when mortgage rates remain stubbornly high."

While this new housing stock will attract certain crowds — like millennials looking to save — it could be a turnoff for older generations who don't want to sacrifice space. 

Younger buyers will have to contend with tradeoffs like smaller eat-in kitchens, the survey found, but reining in costs will be a huge incentive.

"This is essentially being done so that homes can get to a more attainable price point for those entry-level buyers," said Arroyos.

In:
• Home Prices
• Architecture
• Home Sales