A Wealth of Common Sense: How to Lie With Charts
The housing market is starting to shift away from larger homes. Over the past 10 years, the median square footage of new homes under construction has dropped from 2,450 to 2,179. A few homebuilders are even making new homes as small as 900 square feet.
Since these homes are smaller, they tend to cost less. That’s leading to data indicating that new home sales are dropping. On a price-per-square-foot basis, the industry standard for comparison, however, new home prices remain strong.
In other words, it’s all in how you look at the data. Today’s economy has a number of conflicting data points.
For instance, there are signs that inflation is starting to surge higher again. However, inflation has sometimes had short bursts higher while still remaining in an overall downtrend. It’s easy to see the comparisons to prior periods of surging inflation.
On the housing front, declining home sizes reverses a decades-long trend. And it makes it easier for first-time homebuyers to afford a property, especially at today’s mortgage rates.
Today’s housing market may be unusual given the lack of existing homes for sale.
However, shifting trends in new homes indicates that the housing market still has more room to run. And that existing homeowners may not have to contend with crashing home prices anytime soon.