New single-family US homes are getting bigger to meet demand from well-off people but fewer single homes are being built resulting in a drag on the economy.
US Census Bureau data released Monday show the percentage of US homes built last year with at least four bedrooms increased to 44%, up from 41% in 2012. Last year’s percentage was the highest for new homes with four bedrooms or more since Census began tracking the figures in 1973.
The Wall Street Journal said that US sales of new homes are running at a pace so far this year of roughly 60% of their annual average since 2000. Meanwhile, the median price of a new home reached $268,900 last year, the highest annual median since Census began tracking the figures in 1963.
“There are the haves and the have-nots,” said Brad Hunter, chief economist for housing market consulting firm Metrostudy, a subsidiary of Hanley Wood LLC. “Those who are buying homes happen to be the people who have money, savings in the bank and have good credit scores.”
In addition to including more extras, new homes simply continue to get larger. The median size (the mid-point where half the number is above and the other half below) of a newly built home came in at 2,384 square feet last year, up 3.4% from 2012. The figure has increased each year since 2009. The trend continued in this year’s first quarter.
David Blitzer, chairman of the index committee of S&P Dow Jones Indices says: "New construction, not sales of existing homes, is what generates jobs and adds to GDP growth. In most recoveries, the share of single family homes in housing starts (see first chart) surges. This time, there was an initial surge followed by a sharp drop. While apartment construction is up, it has not made up the difference in housing starts which continue at about two-thirds the level we should be seeing."
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