Previous posts have discussed the upward trend in the median and average size of new single-family homes and how part of this is likely due to a historically atypical mix of buyers in the market. A question not addressed so far in these posts is whether this trend is evident at the top end of the market.
The answer is yes, according to recently released data from the Census Bureau’s Survey of Construction (SOC), to the extent that 5,000+ square foot homes have recovered roughly to where they were in 2008, both as a share of all new construction and in absolute numbers—approximately 20,000 in 2013, accounting for a little over 3 percent of the total new single-family market.
In the boom year of 2006, 3.04 percent or 45,000 new homes started were 5,000 square feet or larger. In 2007, the share of new homes this size reached a peak of 3.56 percent, yet the total number of 5,000+ square-foot homes started that year fell to 37,000. In 2008, only 20,000 such homes were started or 3.24 percent of the total. From 2009 to 2011, fewer than 13,000 of these large homes were started every year, accounting for less than 3 percent of all new construction during this period (See Chart 1).
In 2012, the number of new homes started with 5,000+ square feet rose to 15,000 units, yet their share remained at only 2.78 percent. In 2013, both the number of 5,000+ square feet homes started (21,000) and their share of the new market (3.33 percent) were the highest since 2007 (See Chart 2).