More people are living larger and enjoying plenty of elbow room at home.
While the volume of new-home sales nationwide hasn’t returned to prerecession levels, the percentage of larger homes sold has climbed in recent years.
Larger new homes, which require ample roofing material, siding, gutters, and high-end materials, offer contractors more lucrative projects.
In 2005, before the housing bubble burst, new homes sold at a rate of 1.3 million per year; sales dropped to half that rate in 2015, according to Construction Dive referencing data from Houzz.
When US builders began to see new-home sales volumes slide, they shifted their focus to affluent home buyers to stay afloat and ride out the recession.
The move was entirely strategic.
Wealthy buyers want to hang their hat in larger, luxury homes. They also have either the cash or credit score to quickly move forward too. Affluent home buyers have had the means to purchase new houses during the economic downturn and could more easily qualify for loans under renewed, tighter mortgage standards.
For example, 7% of new homes in 2005 measured 4,000 sq. ft. or more; in 2015, 11% of new homes had reached that size. Meanwhile, the percentage of smaller new homes measuring 1,400 sq. ft. or less has shrunk, from 9% of new homes sold in 2005 to 4% in 2015.
Another reason new-home builders shied away from building small-to-medium-sized homes is because foreclosures flooding the market during the downturn were typically this size.
Industry Impact — Roofing and siding contractors that specialize in residential construction should seek out markets where new-home builders are constructing homes with 4,000 sq. ft. or more.
Tracking the moves of consumer products makers since 2003, Catherine Colbert is an industry researcher, writer, and blogger. Previously, she spent ample time in magazine publishing, technical writing, ad copywriting, medical writing, and marketing. Follow her on Twitter.