Shrinkflation isn’t just for candy bars anymore—it’s creeping into the housing market, especially in the South, where homebuyers are paying more for less space.
A new study by USA Today/Homefront and Realtor.com reveals that the median American home has shrunk by 128 square feet over the past five years, even as prices have surged by $125,000.
Shrinkflation, typically linked with smaller snack sizes at unchanged prices, is now making its mark on real estate.
Since 2019, U.S. homes have shrunk by an average of 6%, while prices per square foot have jumped by 52%.
This squeeze isn’t isolated. Only 18 of the 150 metro areas analyzed saw homes increase in size, with Colorado Springs seeing the steepest drop—homes there are now 21% smaller but 50% more expensive per square foot.
“The shrinking size of homes in the U.S. market, despite rising prices, is driven by a combination of economic factors, particularly inflation, increased construction costs, and the ongoing affordability crisis,” said Dayna Drake, a researcher with USA Today/Homefront.
Builders are being forced to either raise prices or reduce square footage to keep homes within reach for potential buyers.
Interestingly, seven of the ten cities with the sharpest declines in home size are in the South, with North Carolina alone claiming four spots.
Rapid population growth in states like Texas and North Carolina has builders scrambling to keep up, squeezing more units into increasingly scarce urban land.
The business of real estate is facing a tough challenge: although reduced home sizes might seem like a way to lower construction costs, the reality is different.
Drake points out that demand and material costs are continuing to push homeownership out of reach for many Americans.
So, while homes may be shrinking, buyers’ hopes of owning one are shrinking even faster.
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