The NAHB Studies Characteristics of Single-Family Homes

Smaller footprints will remain popular beyond the recovery, and many other luxury amenities are becoming more rare.

The long, deep recession of the past several years has taken a harsh toll on the nation’s home building industry at every level, even influencing the types of houses that are built and the features consumers are willing to purchase. As the industry stumbles back toward better health, some of the features and amenities popular during the boom years will regain their popularity, but some recent trends likely are here to stay.

In particular, homes with smaller footprints are projected to remain popular among consumers, according to a recent study by the NAHB. The organization scrutinized census data collected from 2005 to 2009 on the characteristics of new homes started in that period to identify trends. The most significant change in home features has been the median size of single-family homes. In 2006, the median size of single-family homes peaked at 2,268 square feet, but in 2007 houses began to shrink. Median square footage has continued to decline since then, dropping to 2,100 square feet in 2009.

According to Paul Emrath, vice president for survey and housing policy research and author of the NAHB’s “Characteristics of Single-Family Homes Started in 2009” report, past declines of this significance in median square footage occurred during the recession of the early 1980s. Home sizes eventually grew as the economy recovered from that period. Currently, tightened lending standards and lower equity in existing homes mean consumers can afford less, and many have learned that purchasing a home—while still a decent long-term investment—is not a guaranteed money-maker.

But while the current trend for smaller homes partially may be driven by economic troubles, one of the main reasons consumers are interested in less square footage is their concern about high energy costs—and that is unlikely to change, the report notes. An appreciation for the inherent energy-saving qualities of smaller homes had started to emerge even before the housing market went bust and dragged the economy down with it.

Production homes are not the only ones to experience shrinkage in response to new consumer mindsets, either. The median size of contractor-built homes—typically the largest on average—declined, as well, even as this segment’s share of construction increased from 11.4 percent in 2005 to 18.6 percent in 2009. Owner-built homes have remained relatively stable, starting at 7.5 percent of the market in 2005, rising to 12 percent in 2008 and then slipping to 11.4 percent in 2009. In 2007 and 2008, more than 9 percent of the homes started were 4,000 square feet or larger; but in 2009, that number slid to 7.3 percent.

Many of the features homeowners require—such as number of bedrooms—haven’t experienced significant declines during the recession, despite smaller square footages, but luxury amenities are another story, according to the NAHB’s report.

Fewer new single-family homes include three-car garages, fireplaces, patios, and decks. Three-car (or more) garages have declined from 19 percent in 2005 to nearly 16 percent in 2009; fireplaces have slid from about 55 percent to about 49 percent; patios have declined from 48 percent to 44 percent in 2009; and decks have declined slightly from 26 percent to 24.5 percent. However, the number of new homes with porches has increased since 2005, rising to 63 percent in 2009 from 54 percent. Porches tend to be considered design elements of houses, rather than outdoor amenities.

One luxury feature remains consistently popular in new homes: the two-story foyer. In 2009, 35 percent of all single-family homes started included two-story foyers, but it is most common in more expensive homes. The larger and more expensive the home, the more likely it was to include a two-story foyer, the data shows. Of the homes started in 2009 that included two-story foyers, 58 percent were priced in the $500,000 to $999,000 range, while nearly 71 percent were in the $1,000,000 or higher range. Nearly 54 percent of them were in the 3,000-4,999 square foot range, and about 71 percent measured 5,000 square feet or more.

Although interest in alternative building and framing systems has seemed strong in recent years, the vast majority of new single-family homes started in 2009 (95 percent and higher) used wood as the primary framing material, no matter the size, price, or construction method. Insulated concrete forms or structural insulated panels (combined in the data) accounted for less than 0.5 percent of new homes started across all size ranges. Steel framing was used in 1.5 percent of homes under 1,200 square feet and in 1.3 percent of homes priced under $100,000, but was used in 5.1 percent of all modular homes started in 2009.

In 2009, vinyl was the most common siding product, used by 36 percent of new homes. Vinyl’s share has increased steadily since 2005. Brick has remained mostly stable as a siding choice, increasing just slightly from 21 percent to 23.2 percent in 2009. Stucco has declined sharply as a siding material, most likely because it is mainly used in the West and Southwest, where new home construction dropped the most during the recession. It fell from 22 percent in 2005 to 17.5 percent in 2009. Fiber cement siding usage increased steadily, with 13 percent of new homes started in 2009 using it, and wood or wood-product siding was used by about 8 percent of new homes started in 2009.

Some of the adaptations to market demands and economic pressures in the past few years may linger well past the recovery as a result of permanently altered consumer perspectives, but others probably will experience a renaissance of popularity as more-confident and economically secure home buyers once again flex their spending muscle.

Those home features that resurge won’t necessarily be the showpieces of the past, intended mainly to signify one’s success, although a luxury home will still maintain a certain level of luxuriousness. “Certain amenities will come back, but they’ll be related to making lifestyles more efficient, achieving a better lifestyle, and energy efficiency,” says Steve Melman, NAHB’s director of economic services. Home sizes may increase slightly once the market has fully recovered, Melman thinks, but the NAHB and its industry experts don’t expect the “bigger is better” trend of the boom years to continue unchecked. Instead, home sizes will likely find a new equilibrium.

By Stephani L. Miller. This article first appeared in CUSTOM HOME 2010 magazine.