Per-square-foot price of homes reaches new heights

Memphis, Tenn. ($92)
Cleveland, Ohio ($103)
Pittsburgh, Pa. ($134)
Indianapolis, Ind. (134)
Buffalo, NY ($139)

Home Bay additionally found that Memphis—while also recording the lowest price per square foot—had the biggest houses nationwide with a square footage of 2,630. The median square footage of a newly built single-family home has increased 50% since 1980 from 1,570 to 2,356 today while the occupancy rate decreased from 2.8 to 2.5 meaning people today have more space per person than previous generations.

In an interview with Mortgage Professional America, spokeswoman Danetha Doe (pictured) reiterated the reasons for the steady increases, but noted the role of institutional investors can’t be overlooked either. “There’s a lack of supply when it comes to homes, the cost of building a home has gotten more expensive, and I do believe there are issues in the way that on the one hand we say every American should have homeownership but it’s also turned into a cash grab for financial institutions,” she said.

In reciting more statistical data, Doe inadvertently pours more salt into the wound: “Income from 2000, when adjusted for inflation, has only increased 3% each year. Inflation prior to this year 2% to 4% a year, and I think last month was 9.1%. The price per square foot has increased more than income and inflation – not sustainable at all.”

The study also looked at median square footage, finding it’s increased by 50% even amid trends showing fewer people per household since 1980. According to the study, the median square footage of a new single-family home is 2,356 square feet — 886 square feet more than 1980’s 1,570 square feet. The average household size is down from 2.76 to 2.51 people. That means the square footage per person is 949 square feet in 2021, compared to 1980’s 569 square feet per person.