Number of 5,000+ Square Foot Homes Down in 2022

2023-09-28T10:23:23-05:00

According to the annual data from the Census Bureau’s Survey of Construction (SOC), a total of 29,000 5,000+ square-foot homes were started in 2022, down from 33,000 in 2021.  In the boom year of 2006, the number of new 5,000+ square foot homes reached a peak of 45,000.   In 2007, the number fell to 37,000.  In 2008, only 20,000 such homes were started, and from 2009 to 2012, the number remained well under 20,000 a year, but has been consistently above 20,000 since then. On a percentage basis, the share of new homes started with 5,000 square feet or more of living space was also down slightly, from 2.90% in 2021 to 2.85% in 2022.  In 2015, the 5,000+ square foot home share reached a peak of 3.92%.  Since then, the share has fluctuated in a band between 2.50% and 3.10%.  The 2022 decline in the share of 5,000+ square foot homes is consistent with the recent downward trend in median and average size of new single-family homes reported elsewhere. Tabulating the major characteristics of 5,000+ square foot homes started in 2022 shows that 80% have a porch, 70% have a finished basement, 68% have 4 bathrooms or more, 66% have a patio, 67% have a 3-or-more car garage, 56% belong to a community association and 54% have 5 bedrooms or more. Related ‹ Lot Values Trail Behind InflationTags: economics, eye on the economy, home building, housing economics, single-family, starts, survey of construction

Number of 5,000+ Square Foot Homes Down in 20222023-09-28T10:23:23-05:00

Unaffordable Prices & Bidding Wars Hold Buyers Back

2023-08-02T09:34:25-05:00

By Rose Quint on August 2, 2023 • An earlier post revealed that 69% of buyers who were actively engaged in the process of finding a home in the second quarter of 2023 have spent 3+ months searching for a home without success. The inability to find an affordable home remains the most common reason buyers looking for 3+ months can’t make a purchase, cited by 38% (although that is down from 45% in the final quarter of 2022).  Next most common reason is getting outbid by other buyers, at 36% (up from 30% in the final quarter of 2022), followed by the inability to find a home in a desirable neighborhood (up from 30% to 33%) and one with desirable features (up from 28% to 31%). When asked what they are most likely to do next if still unable to find a home in the next few months, 46% of active buyers searching for 3+ months said they will continue looking for the ‘right’ home in the same location; 38% will expand their search area, 30% will accept a smaller/older home (up from 23% in Qtr4’22 and 27% in Qtr1’23), and 25% will buy a more expensive home.  Interestingly, despite bleaker affordability expectations, the share who plan to give up their home search until next year or later fell to 21%, down from 23% in the first quarter of the year. *Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here.  This is the final in a series of six posts highlighting results for the 2nd quarter of 2023. See previous posts on plans to buy, new vs. existing preference, housing availability, housing affordability, and active buyers. Related ‹ June Gains in Private Residential Construction SpendingTags: housing economics, housing trends report

Unaffordable Prices & Bidding Wars Hold Buyers Back2023-08-02T09:34:25-05:00

Some Buyers Remain Engaged, Despite Lower Affordability

2023-07-31T09:26:16-05:00

By Rose Quint on July 31, 2023 • Despite lower perceptions of affordability, the share of prospective home buyers who are actively engaged in the purchase process (i.e., have moved beyond the planning phase) remained essentially unchanged between the first and second quarters of 2023, at 56% and 55%, respectively. The lack of change in this metric suggests that some buyers are willing to continue trying to find a home despite higher prices and mortgage rates. From the first to the second quarter of 2023, the share of prospective buyers actively searching for a home declined in the Northeast (63% to 60%), South (51% to 48%), and West (66% to 58%), but rose in the Midwest (45% to 56%). The combination of slightly softer demand plus increased production by builders is helping some of these engaged buyers find a home in less time. From the first to the second quarter of 2023, the share of active buyers who have spent 3+ months searching for a home eased a bit, going from 71% to 69%. * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the fifth in a series of six posts highlighting results for the 1st quarter of 2023. See previous post on plans to buy and new vs. existing preferences, and housing availability, and housing affordability. Related ‹ Housing Share of GDP Remains Lower in the Second Quarter of 2023Tags: housing economics, housing trends report

Some Buyers Remain Engaged, Despite Lower Affordability2023-07-31T09:26:16-05:00

Housing Affordability Expectations Slide Back, Again

2023-07-28T09:20:37-05:00

By Rose Quint on July 28, 2023 • After a reprieve in the first quarter of 2023, buyers’ outlook for housing affordability turned bleaker again in the second quarter.  According to the latest Housing Trends Report, 76% of buyers are able to afford less than half the homes for-sale in their markets, up from 73% in the first quarter of 2023. On the flip side, the share able to afford most homes available fell from 27% to 24%.  The shift provides evidence that recent upticks in home prices and mortgage rates are filtering directly into home buyers’ affordability expectations. Affordability expectations between the first and second quarters of 2023 worsened in three regions.  In the Midwest, the share of buyers able to afford less than half the homes available grew from 73% to 81%; in the South from 76% to 79%; and in the West from 66% to 72%.  The only exception was the Northeast, where the share declined from 75% to 69%, i.e., fewer buyers were able to afford only a minority of the inventory available. * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here. This is the fourth in a series of six posts highlighting results for the 2nd quarter of 2023.  See previous post on plans to buy and new vs. existing preferences, and housing availability. Related ‹ GDP Growth Is Stronger Than Expected in the Second QuarterTags: housing affordability, housing economics, housing trends report

Housing Affordability Expectations Slide Back, Again2023-07-28T09:20:37-05:00

More New Homes Improve Expectations of Housing Availability

2023-07-27T09:21:26-05:00

By Rose Quint on July 27, 2023 • Increased levels of new home construction and sales are leading some buyers to expect the home search to get easier in the months ahead.  According to the latest Housing Trends Report for the second quarter of 2023, 29% of prospective buyers are anticipating housing availability to ease up ahead, an improvement over the 24% and 26% who had similar expectations in the final quarter of 2022 and the first quarter of 2023, respectively. Housing availability expectations have improved all around the country.  Between the final quarter of 2022 and the second quarter of 2023, the share of buyers expecting an easier home search ahead rose most significantly in the Northeast (28% to 36%), followed by the West (27% to 34%), the Midwest (19% to 25%), and the South (24% to 27%). Another way to measure buyers’ perceptions of housing inventory is to ask them if they are seeing more/fewer/the same number of homes for-sale (with desired features and price point) in their markets.  By this measure, buyers’ perceptions have remained essentially unchanged, as the share seeing more homes available for-sale* in their markets barely moved from 30% in the final quarter of 2022 to 31% in the first two quarters of 2023. Inventory perceptions changed unevenly across regions.  From the final quarter of 2022 to the second quarter of 2023, the share of buyers seeing more homes (with desired features and price point) increased in the Northeast (26% to 42%) and Midwest (23% to 28%), but edged down in the South (32% to 31%) and the West (31% to 30%). * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here. This is the third in a series of six posts highlighting results for the 2nd quarter of 2023.  See previous post on plans to buy and new vs. existing preferences. Related ‹ Measured Hawkishness: The Fed Hikes in JulyTags: housing availability, housing economics, housing trends report

More New Homes Improve Expectations of Housing Availability2023-07-27T09:21:26-05:00

Interest for New Homes Strengthens

2023-07-25T09:37:05-05:00

By Rose Quint on July 25, 2023 • Higher interest rates have led millions of existing homeowners with mortgages under 4% to postpone plans to list their homes for sale, and for many prospective buyers, that supply vacuum has left newly built homes as the only game in town.  That is the backdrop behind the strengthening of interest for new homes. According to the latest Housing Trends Report, between the final quarter of 2022 and the second quarter of 2023, the share of buyers looking to buy new construction rose from 20% to 25%.  In contrast, the share interested in existing homes dropped from 39% to 36%, while the share with no particular preference fell from 41% to 39%. Interest for new homes is widespread.  Between the final quarter of 2022 and the second of 2023, all regions saw the share of buyers interested in new homes increase.  In the West in particular, the share jumped from 21% to 32%, followed by the Northeast (20% to 24%), the South (20% to 23%), and the Midwest (15% to 18%). * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here. This is the second in a series of six posts highlighting results for the 2nd quarter of 2023.  See previous post on plans to buy. Related ‹ Housing Demand Slows on Higher Rates and PricesTags: housing economics, housing trends report

Interest for New Homes Strengthens2023-07-25T09:37:05-05:00

Housing Demand Slows on Higher Rates and Prices

2023-07-24T09:18:42-05:00

By Rose Quint on July 24, 2023 • Mortgage rates’ slow –but steady– march upwards combined with the return of home price gains are doing what they are predicted to:  slow housing demand.  According to the latest Housing Trends Report, the share of adults with plans to purchase a home within a year dropped to 15% in the second quarter of 2023, down from a record high of 18% in the first quarter. First-time buyers are disproportionately affected by elevated mortgage rates and home prices because they generally lack equity savings from a previous home sale to help with a down payment.  In the second quarter of 2023, the share of all prospective buyers who are in the market for the first time dropped to 61%, down significantly from 71% in the first quarter. The share of adults with plans to buy a home in the next 12 months declined across all regions of the country between the first and second quarters of 2023: Northeast (19% to 18%), Midwest (14% to 13%), South (17% to 11%), and most significantly in the West (23% to 17%). Similarly, the 1st-timer share lost ground in all four regions between the first two quarters of 2023: Northeast (66% to 61%), Midwest (67% to 61%), South (68% to 59%), and West (75% to 65%).  *Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here.  This is the first in a series of six posts highlighting results for the 2nd quarter of 2023. Related ‹ Employment Situation in June: State-Level AnalysisTags: housing economics, housing trends report

Housing Demand Slows on Higher Rates and Prices2023-07-24T09:18:42-05:00
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