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Americans seek smaller homes … or do they?

March 8th, 2012 by John Kirchner

We’ve written plenty over the past year about Americans shifting their sights to smaller homes. Countless surveys support the claim, but the reality is while more Americans may prefer smaller homes compared to five years ago, they are still buying big.

What gives?

Brad Plumer of the Washington Post reports the size of new homes is distorted by the relatively low number of new starts and the type of people who are buying them:

“Most Americans might prefer smaller homes, but right now, they’re not doing much buying. Lending is still tight, which means that the market for new homes is still dominated by a small handful people with high incomes, great credit and lots of money for a down payment. Those buyers are usually on their second or third or fourth home, and they’re usually buying homes that are much larger than average.”

Plumer cites a survey from the Urban Land Institute that found homes built in the first half of 2011 averaged 2,522 square feet or roughly an entire bedroom (141 sq. ft.) larger than homes built the year before.

This creates a predicament for contractors, of course. While consumers claim they want smaller, more sensible homes, larger homes are selling.

How could this information impact your strategy?



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