The average square footage of a completed new single-family home in the U.S. continues to increase. This has potential implications for regional lumber production and timber prices as this increase translates into higher levels of wood demand.
According to the U.S. Census, these homes averaged 2,687 sq. ft. in 2015, a 12% increase since 2010 and up 62% since 1973, when the average newly built home was 1,660 square feet. The Great Recession reduced the size of completed new single-family homes by 5% to 2,392 sq. ft. By 2013, the average square footage was back above the 2007 highs. The rate of growth is slowing, however, increasing at just over one percent year-over-year. Completed new homes in the Northeast had the most square footage regionally in 2015, averaging 2,792 sq. ft., followed by the South with 2,750 sq. ft., and the West and Midwest with 2,615 and 2,526 sq. ft., respectively (Figure 1).
In 2015, 47% of completed new single-family homes averaged between 1,800 and 2,999 sq. ft. (Figure 2). Homes that averaged 3,000 sq. ft. or more now represent the second largest segment of the market. This segment represented 31% of completed new single-family homes in 2015, almost doubling from 17% in 1999.
Though U.S. housing starts remain subdued—a seasonally adjusted annual rate of 1.167 million units in May 2016—the increasing size of each single-family unit has important implications for the forest industry. Each housing start will use more total raw material than in previous years, multiplying the effect of increased housing starts on demand for forest products.
Forisk Analyst/Project manager Andrew Copley supported the research for this blog post.
Research on housing trends supports analysis of wood markets, timberland and other forestry-related investments. To learn more about the FRQ, click here or contact Brooks Mendell at firstname.lastname@example.org, 770.725.8447.