Saturday, June 4, 2016

Thank You Janet Yellen: The Size of Newly Constructed Homes is Exploding

The median size of a new single-family house was 2,467 square feet last year, the biggest on record, according to Census Bureau data out this week. That's 11% larger than a decade ago.

The median sales price of a new home was $296,400 last year, according to Census, a new high. Even when adjusted for inflation, new-home prices hit a record last year.

A separate Commerce Department report out last week showed housing starts rebounded in April, leaving builders on pace to break ground on 778,000 single-family homes this year.

This is not what a recession looks like.



  1. Construction hiring down two months in a row IS what a recession looks like.

  2. Starter homes and other smaller new single family homes are no longer profitable to construct thanks to regulations, taxes, and other government imposed costs. Even if Ms. Yellen raised rates these would be the only new homes on the market.

    1. No Robert, it's not what a recession looks like but it is what a "top" looks like. Having observed the Vero Beach (Fl) housing maket over the last 2 decades, I've seen all of this before. Current condition: Larger more expensive homes sitting on the market for long periods of time; contracts falling through; real-estate agents willing to negotiate commissions(!); raw land being cleared everywhere for more housing...a soon to be revealed classic misallocation of resources. I would guess that we are in the last half of the eight inning on this cycle but I could be wrong.