Share of New Homes Started With 3 Bedrooms Increases in 2019

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The U.S. Census Bureau’s Survey of Construction’s (SOC) estimate of the number of bedrooms in new single-family homes has shown a declining trend for homes with 4 bedrooms or more since 2015 and a rising trend for homes with 3 bedrooms. The most recent SOC data show the number of bedrooms of new homes whose construction began in 2019 (new homes started).

Nationally, the number of single-family homes started with 3 bedrooms increased from 45.3% in 2018 to 46.9% in 2019. These developments are linked to changes in the makeup of homebuyers from the previous years. In 2018, the share of new homes started with 2 bedrooms or less increased, signifying an increase in first-time homebuyers, many of whom would prefer smaller houses. In the next year, per the SOC data, this share decreased, possibly signifying fewer first-time homebuyers in the market.

That the share of new homes started with 3 bedrooms was the only category to experience an increase is revealing of the nature of housing demand in 2019. Also, as is the case with the number of bathrooms in new homes started in 2019, the number of bedrooms is strongly positively correlated with the square-foot area of new homes started. Seventy-five percent of all new homes started between 1,600 and 1,999 square feet were those with 3 bedrooms. In higher tiers of home sizes, the shares of homes started with 3 bedrooms decreased. Finally, and not surprisingly, 82% of homes with a square foot area of 1,200 or less had 2 bathrooms or less, as well.

As the above figure shows, the New England Census Division experienced the greatest increase in the share of new homes constructed with 3 bedrooms from 2018; however, it also experienced the greatest absolute change of all the nine Census Divisions in terms of number of units with 3 bedrooms.

Interestingly, the 2019 SOC data show variation in the number of new homes started with 3 bedrooms in different tiers of home prices in the built-for-sale market, which makes up 75% of the market of all new homes started. In 2019, in higher tiers of home prices in new houses specifically built for sale, the share of new homes started with 3 bedrooms declined. In the built-for-rent-market, which make up only 4% of all new homes started in 2019, 51% of homes had exactly 3 bedrooms, thus making it the preferred category in the number of bedrooms for that market.



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