Businessweek Archives

Home Builder Shows Really Small Homes


In this brutal housing market, new home builders are thinking small, small, small. For decades the average size of a U.S. Home had been rising, from 1,700 square feet in the 1970s to almost twice that recently. Analysis by the National Association of Home Builders suggests the average home size fell 7% in last year’s third quarter to 2,400 square feet. Some builders are going even smaller than that.

Los Angeles based KB Home has seen its target home size shrink from 3,400 square feet to 2,400 to 1,200. Recently the company unveiled models in suburban Houston that are just 881 square feet.

According to the Houston Chronicle, the company is targeting singles and couples without kids. The two bedroom, “apartment size” homes are selling for just $64,000. That’s $350 a month in mortgage payments with 3.5% down.

At that price the company is offering new homes at prices that compete with foreclosures. The average home price in Houston fell 8% to $127,000 in January. One in three homes sold was a foreclosure.


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