Census Bureau data for 2023 shows new American homes are a little smaller:

But as the cost of buying a home has exploded and McMansions have fallen out of favor, homebuilders have reversed course, building smaller homes with an eye to first-time buyers. In 2023, the median single-family home built was 2,233 square feet, down 9% from the 2015 peak, with many formal dining rooms and “bonus” rooms disappearing…

Homebuyers are warming up to the idea of smaller dwellings: According to an April study from the National Association of Homebuilders, the typical buyer wants a home that is 2,067 square feet — still smaller than the typical new home size last year…

There are signs those efforts might be helping buyers get in the door: The median sales price of existing homes jumped to $426,900 in June, according to the National Association of Realtors, while the median price of new homes in June was $417,300, according to the US Census Bureau.

Three thoughts in response:

1. It will be interesting to watch the long-term trends. The article marks 2015 as a peak. Does this mean homes will continue to get smaller in the coming years?
2. Connected to #1, how much do Americans want smaller homes or how much do housing prices constrain what Americans expect and want? The first option could be connected to Americans having less stuff. If you buy more consumer goods, you need somewhere put them. But if you stream everything and prioritize experiences, perhaps a house is not needed as much for storage. Or if household sizes are decreasing, smaller homes could be fine. In contrast, if mortgage rates went down or housing prices became more attainable for people, would they once again want bigger houses?
3. The figures above suggest the new homes are slightly lower in price than existing homes. But the newer smaller homes are still pretty expensive. At what price point and square footage would a bunch of potential homebuyers be able to jump into the market? Where do these lines cross on a graph? A median of 1,800 square feet at $340,000 (very hypothetical)?
4. From the Census data, it may be worth noting that since 1999 the percent of new homes completed at 3,000 square feet or higher has always been a minority of the market (at 31% in 2015). Now this size is a smaller segment of the market as the mid-size new homes percentages are up (1,400 to 2,399 square feet).