Bwild:

From that article, it was the first time in 15 years that the average size of homes had decreased:

"To be precise, the median square footage of newly built homes fell to 2,065 square feet in the first three months of this year, compared with the same period last year, according to the U.S. Census Bureau."

For the first three months of 2008. The question is: Is it a trend, or merely a one time occurrence in 15 years?

I found an interesting set of data from the United States Census Bureau:

http://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf

If we look at that table, there are some interesting things we can notice.

From 1973 to 2007 the mean and average square areas increased. Then 2007, 2008 and 2009 saw a decrease in the areas. The most likely explanation is the subprime mortgage crisis of 2008 which continues into the present.

The areas also depend on which part of the USA we look at. The northeast actually saw an increase in areas, in spite of a decrease in areas in other parts of the country.

Nevertheless the trend is clear. In 1973 the average area for a single family home was 1660 sq. ft. By 2007 the areas peaked to 2521 sq. ft. That is an increase of 861 sq. ft. or 52% increase over a 34 year period. In essence the average home added the area equivalent to that of an extra 2 bedroom apartment.

The last 3 years saw a modest decrease from 2521 to 2392 sq. ft. That is 129 sq. ft. Obviously financing for mortgages has become more difficult, and that means that people can borrow less and are forced to build slightly smaller homes.

We can only hope that the trend will continue so that the market place can add some moderation to the ever increasing house sizes.