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US homes actually got bigger during ugly 2011

The housing market is struggling, but the size of new homes being built is on the rise.
The housing market is struggling, but the size of new homes being built is on the rise.Mark Duncan / AP

The American dream grew by 88 square feet last year.

For the first time in four years, the size of the average new American house increased slightly in 2011 -– to 2,480 square feet from 2,392 square feet in 2010, according to new figures from the Census Bureau. That modest expansion initially stumped some market analysts because the boost came amid a horrid year for new-home sales, and while mortgage lenders continued to squeeze their standards on doling out home loans. 

"We had the same question: Why was this happening when most people want smaller homes, want to downsize?" said Rose Quint, assistant vice president for survey research at the National Association of Home Builders. "This is exactly so counterintuitive to what we know is happening on the ground."

The NAHB's analysis shows that the rise in average-home size was driven by an increase in the relative portion of sales to deeper-pocketed "move up" and luxury buyers rather than the first-time buyers who typically propel much of the new-home market.

With credit for new homes tight after the housing bust of the past five years, first-time buyers are less likely to scrounge up the down payment money most lenders now require, Quint said. So the market -- which is about of the quarter of the size it was at its peak in 2005 -- has shifted toward more upscale buyers.

"That’s why we see this increase in square footage," Quint said. "(It was fueled) by who was left standing."

Amid the extra space, more Americans also decided to devote more of their rooms to resting and cleansing in 2011 -- all beneath slightly taller dwellings, the census figures show.

Homes with four or more bedrooms comprised 39 percent of the new, single-family American housing stock last year. In 2010, 35 percent of new homes had four or more bedrooms. In 2009, 34 percent of the new houses spanned that size. 

Down the hall, bathrooms also were more plentiful: 28 percent of new houses offered three or more bathrooms in 2011 as compared to 25 percent in 2010 and 24 percent in 2009. And 54 percent of new American abodes were two stories or taller in 2011 -- a small bump over 2010 (52 percent) and 2009 (53 percent).

PulteGroup Inc., the largest U.S. homebuilder by revenue in 2011, and Lennar Corporation, No. 3 on that list, each declined to comment for this article. The second-ranked American homebuilder, D.R. Horton, did not respond to e-mails and phone messages from seeking comment. 

During 2011, homebuilders suffered through a historically slow transaction pace. Last year, 302,000 new homes were sold (down from 323,000 in 2010). That marked the lowest level dating back to 1963, the U.S. Commerce Department reported in January. Besides the harsh economy and tighter home lending practices, that decline also came as federal first-time homebuyer tax credits lapsed 2010.

Speaking on background, some national homebuilders agreed that 2011 simply marked a change in the overall mix of new-home buyers and, consequently, in the increased, average size. Bigger homes, they said privately, did not reflect a true uptick in the overall housing market.

And because there were so few sales of newly constructed homes, the sample size was far smaller than normal, allowing for upscale buyers to skew the figures, Quint said.  

"The size of the pie we’re talking about was so tiny, whoever makes up the bulk of that pie makes up what the size of the average home looks like," she said. "But the numbers are not misleading. That's what was built in 2011. The interesting story is why that was built in 2011 when every other source indicated most people were not buying (or building) homes." 

The pinnacle of U.S. home size came in 2007, just before the housing market spun into freefall. That year, the average size was 2,521 square feet, according to Census data. For context: the average size of an American home in 1973 was 1,660 square feet.