US Sets New House Size Record in 2012

There have been numerous press reports about the expansion of micro housing, and expectations that Americans will be reducing the size of their houses. As the nation trepidatiously seeks to emerge from the deepest economic decline since the 1930s, normalcy seems to be returning to US house sizes.

According to the latest new single-family house size data from the US Census Bureau, the median house size rose to an all-time record of 2306 square feet in 2012. This is slightly above the 2277 square feet median that was reached at the height of the housing bubble in 2007 (Figure). The average new house size (2,505 square feet) remains slightly below the 2007 peak of 2,521 square feet.

There was little coverage in the media, with the notable exception of Atlantic Cities, in which Emily Badger repeated the expectation of many:

“It appeared after the housing crash that the American appetite for ever-larger homes was finally waning. And this would seem a logical lesson learned from a recession when hundreds of thousands of households found themselves stuck in cavernous houses they neither needed nor could afford.”

But she concluded “Perhaps we have not changed our minds after all.” Well stated.

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Great topic

There are people who had to pay everything they earned for the most basic necessities for survival - food, clothing and shelter and If their incomes rose, so did the prices of the basic necessities, with higher profits going to those who owned the means of production, i.e. land. This is "monopoly rent". Marx advocated nationalising the means of production, to put an end to this. HostGator Vs BlueHost

Wow, Great

Just what an incredible misinterpretation associated with files.

The key reason why that BRAND NEW homes have cultivated in dimensions throughout the last 5 a long time is that most those people are generally alternatively rich. Bluehost

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There have been numerous

There have been numerous press reports about the expansion of micro housing, and expectations that Americans will be reducing the size of their houses. As the nation trepidatiously seeks to emerge from the deepest economic decline since the 1930s, normalcy seems to be returning to US house sizes. Bluehost review

As usual

What an incredible misinterpretation of data.

The reason that NEW homes have grown in size over the last 5 years is that the majority of those people are rather wealthy.

Whereas before, it was "how much space can I get with my subprime mortgage"

So while expectations may have not changed, the pocketbooks have.

Econ 101 lesson for you

Actually, there is an identifiable economic paradigm at work. "Monopoly rent" gives way to "consumer surplus" - as long as free markets are allowed to work.

There was a time when people had to pay everything they earned for the most basic necessities for survival - food, clothing and shelter. If their incomes rose, so did the prices of the basic necessities, with higher profits going to those who owned the means of production, i.e. land. This is "monopoly rent". Marx advocated nationalising the means of production, to put an end to this.

However, transport improvements ended monopoly rent. Once the supply of land accessible at economic cost, was larger than that necessary to provide everyone's needs for food, clothing and shelter, "economic land rent" fell dramatically as a proportion of everyone's cost of living. There is probably no economic land rent at all incorporated in the price of a loaf of bread or a vest, or any necessities or consumption items or any products at all.

This phenomenon has meant that rising incomes could be spent on "more stuff" instead of paying higher and higher prices for the same stuff. The difference between what you would pay "if you HAD to" and what you DO pay in a competitive free market, is "consumer surplus".

Now there is very obviously consumer surplus in housing, where the housing market is relatively free. People tend to pay a similar proportion of their incomes for housing as they have done for a long time, for larger and better housing. It is noticeable that median multiples in affordable markets settle at around 3 even as houses get larger and of higher quality.

However, growth containment urban planning results in the housing market being determined by "monopoly rent", not "consumer surplus". In these markets, median multiples seem to be always 6 and over (and more volatile) regardless of how much space and quality is sacrificed by households. Rising incomes result in economic land rent (in price per square foot terms) rising and rising to absorb a roughly constant "share of incomes that people can possibly sacrifice" for housing.

It is very ironic that the political parties who claim to represent "labour", are most often total suckers for growth containment urban planning, in spite of their idol Karl Marx's clarity about economic land rent. Marx, of course, did not live to see the elimination of economic land rent by cost-effective transport systems.

Shades of Orwell and Hayek

This is very revealing. I believe that all over the first world, there is a repugnant lie being spread about "reduced demand for traditional family homes". This "reduced demand", where there seems to be evidence for it, is in every case the result of distortions to supply that have reduced people's choices.

There is Orwellian "newspeak" to be heard everywhere in this racket. "Smart growth" is actually "stupid suppression of growth". "Reduced demand" is actually racketeering of supply, and price gouging, resulting in houses being priced out of people's reach - like there is "reduced demand" for food in North Korea.

Sadly, in some nations there is no escape from the "high density living purifies the soul" theocracy. Pity the first home buyer in the UK, for example, where the prices of "houses" relative to income have risen inexorably for decades even as the size of new houses has indeed fallen.

At least in the USA people can move somewhere else in the nation that is not run by this humanity-hating theocracy. The ironic result of this is that almost all the new construction occurs in places where there is affordability and freedom of choice, so that the forced diversion of housing market resources into apartments and condos in some places, is swamped in the national aggregate data by all the decent family homes still getting built elsewhere.

And even people who want to live in an apartment close to a CBD job, can do so in Houston for a fraction of the cost involved in this in a "smart growth" city. Like all theocracies with mindless mantras, "smart growthers" are incapable of seeing unintended consequences like the pricing of centrally located and efficiently located property out of the reach of MORE people after their policies are enacted, REDUCING the likelihood of people making efficient relocation decisions. In fact, as Alain Bertaud, Patrick Troy, Peter Hall and others have noted, you end up with higher density development happening in INEFFICIENT locations, because that is all people can afford. They have had to trade off "location" as well as house size. As Bertaud points out, this will tend to INCREASE average commute-to-work distances.

"Unintended consequences"; Hayek proved right; yet again. When will humanity LEARN?

Anybody can, at this time,

Anybody can, at this time, go to the Costco website and apply for a Costco home loan. The chain partners with a small number of lenders and can arrange a home loan for applicants and members and non-members can apply, though customers get a pretty significant discount. An installment loan can help you get cash for closing costs on your house.