Only 41 percent of single-family homes started in 2018 included fireplaces, according to NAHB tabulation of recently released data from the Survey of Construction (produced by the U.S. Census Bureau with partial funding from HUD).  This percentage is the lowest on record since NAHB began tabulating the data in a consistent fashion in 2001.  Since 2015, the share of single-family homes with fireplaces has been declining steadily, setting a new post-2001 record low each of the past three years.

While the NAHB tabulation by starts goes back to 2001, a historical series maintained by the Census Bureau, based on completions, extends all the way back to 1973.  That series, published on the Census web site, shows that 44 percent of single-family homes completed in 2018 had at least one fireplace.  This is tied with 1973 for the lowest percentage on record.

An obvious explanation for the declining trend is that builders are foregoing fireplaces in some of their homes, so they can bring them in at prices their customers can afford.  Keeping new homes affordable has become a considerable challenge lately, as highlighted in last week’s post.  Fireplaces are generally a desirable amenity, but not one that all home buyers report as a must have.

According to the 2019 edition NAHB’s What Home Buyers Really Want, 55 and 48 percent of home buyers rate gas and wood burning fireplaces, respectively, as  desirable or essential.  By this measure, fireplaces fall in the middle of the list of decorative features in the NAHB survey in terms of desirability.  However, the share prospective homebuyers finding that gas fireplaces as desirable or essential has been increasing since 2003, rising from 44% to 55% in 2018.

Consistent with the challenge of trying to build homes at an affordable price in today’s high-cost environment, it shouldn’t come as a surprise that fireplaces are  uncommon at the lower end of the market.  Only 7 percent of single-family homes started in 2018 and priced under $150,000 had fireplaces, compared to over 60 percent of the homes priced at $500,000 or above.  (For how many homes were actually built in each of these price ranges, see last week’s post.)

Geographically, the share of new homes with fireplaces varies only moderately.  Among single-family homes started in 2018, the share ranges from slightly under 40 percent in the Pacific, Mountain and South Atlantic Census divisions, to just over 55 percent in the Middle Atlantic and West North Central.

This post was updated on 10/29/19 with additional detail on consumer preferences.

Tags: affordability, economics, fireplaces, home building, housing, SOC, Survey of Construciton