There are fewer new homes, and they're shrinking

Fewer single-family homes are being built, and their square footage and lot size are also declining, according to an analysis by Zillow.

For the typical new home, square footage declined to 2,300 square feet in 2017 from 2,400 square feet in 2016. The decrease continues the gradual shrinking of new homes through the decade.

Typical lot sizes for new homes followed a similar trend, also decreasing from 2016, according to Census Bureau Survey of Construction data.

Zillow found that the trend was consistent across the nine census divisions. The size of the median single-family home in each division either decreased in size or remained approximately the same when compared with 2016. All divisions saw a similar trend for lot size, except the West South Central division. Across Arkansas, Louisiana, Oklahoma, and Texas, the median lot size increased by 750 square feet.

New homes are getting taller, however, with three-story houses now making up almost 10% of all new construction. These homes only accounted for less than 1% of new construction in December 2014.

Amidst the overall decline in construction, the relative share of one- and two-story homes has also dropped. These homes have been the most commonly constructed single-family homes for years, a trend that continued through 2017.

Zillow found deviations from the trend when considering geographical divisions. For example, there are now approximately as many one-story as three-story homes being built in the Mid-Atlantic and New England. While these two types have seen a steady increase in construction, two-story homes continue to comprise most new home construction in these areas.