December 9th, 2015
Homebuilders are catering to more middle aged buyers by building larger homes.
Since 2000, the typical American home for sale had about 1,800 square feet. That’s remained fairly steady over time.
But new homes that are just being built typically have 2,200 square feet, according to an analysis by the National Association of Home Builders. Potential homebuyers say they want a place that is at least that large.
So what’s going into all that extra space?
“Builders are adding more bathrooms. You want a little bit more privacy,” says Olsen.
Multi-family homes are also booming as people buy homes as investment properties to rent out. In the late 1980s, people would rent for four years before purchasing their first home. Now it’s at least six years.
Large homes often translate to more money for builders. No wonder the stock market funds that track homebuilders are soaring this year.
The iShares U.S. Home Construction ETF (ITB), SPDR S&P Homebuilders ETF (XHB) and iShares Residential Real Estate Capped ETF (REZ) are all up about 6% or more in 2015. That’s much better than the overall stock market, which is negative for the year.