With the exception of 2022 and 2023, the average square footage of new homes has declined since 2015. In contrast, home prices have jumped 46% over the decade, averaging $514,000 in 2024 due to strong housing demand.

This graphic, via Visual Capitalist's Dorothy Neufeld, shows the typical size versus the average cost of a new home since 2015, based on data from the U.S. Census Bureau via Fixr.

Shrinkflation and the Average Cost of a New Home

Below, we compare the average square footage of a single-family home in America to sales prices in the last decade:

Since 2015, the average home size has shrunk by 323 square feet, with even sharper decreases in the South, at 374 square feet.

Meanwhile, prices are $161,000 higher than 10 years ago. Even though average 30-year fixed mortgage rates sit around 6.5–7%—up from 2.7% in 2020—prices remain elevated.

Along with a higher cost of capital, the prices of land, labor, and raw materials have increased meaningfully, further driving up costs. Overall, construction costs account for almost two-thirds of the sales price.

More recent data shows that new-home buyers are at record lows in America, representing just 21% of the total market. Meanwhile, the average age of first-time buyers is at an all-time high of 40. For perspective, first-time homebuyers have made up 38% of all buyers, on average, for about four decades.