The Craving for Bigger Houses
Updated: Nov 9, 2022
We regularly hear that housing in the U.S. has becoming increasingly less affordable, and that certainly seems to be true. In 1973, the median sale price of homes in the U.S. was $30,200, which is about $201,900 in 2022 dollars. But by the third quarter of 2022, the median sale price of homes in the U.S. had risen to $454,900.
Why have homes in the U.S. become so much more expensive over the last 50 years? For most of that period, the inflation-adjusted price per square foot of homes changed remarkably little since the 1970s, though it increased by 28% between January of 2020 and September of 2022.
The primary reason houses have drastically increased in price over the last 50 years is simple: houses have gotten much larger.
Houses increasing in size would make sense if more people were living in the houses, but the opposite has been true for a long time. In terms of the average number of people within them, households in America have been shrinking over pretty much the entire history of the nation. In 1790, there were an average of 5.79 people per household. By 1960, there were only 3.33 people per household, and by 2021, that number had fallen to 2.51.
As the chart above depicts, households have shrunk by an average of nearly half a person since 1973, but the average size of new single-family homes has increased by 46% over the same time. This worked out to an average of 571 square feet per person for new homes in 1973 but 988 square feet per person by 2021!
Americans are 'consuming' far more housing today than they were in decades past, especially on a per person basis.
This enormous increase in consumption has far reaching financial effects. In 2021, the Bureau of Labor Statistics reported that 34% of Americans' spending was on housing. By comparison, Americans were only saving 3% of their disposable income in 2022.
Americans are spending about 11 times more on housing than they are saving.
And, of course, bigger houses don't simply result in bigger mortgages. They come with more mortgage interest and utility and maintenance costs, and that extra space is filled with something that the owners must also buy. And even with all that extra space in Americans' homes, it's apparently not enough since the number of storage units in the U.S. has grown from about 30,000 in 1999 to over 50,000 in 2022.
Scripture is very clear that Christians are called to be content with what they have, not to continually yearn for more.
"Make sure that your character is free from the love of money, being content with what you have; for He Himself has said, “I will never desert you, nor will I ever abandon you," (Hebrews 13:5, NASB).
"Not that I speak from need, for I have learned to be content in whatever circumstances I am. I know how to get along with little, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me" (Philippians 4:11-13).
"But He said to them, “Beware, and be on your guard against every form of greed; for not even when one is affluent does his life consist of his possessions" (Luke 12:15).
This is not to say that it's de facto wrong or even poor stewarding to have a large home. Some can easily afford one, and some greatly benefit from one due to having a large family. But many Americans have struggled financially to buy bigger homes at the same time that their families have shrunk.
What if Americans lived in similarly sized homes to those built in the early 1970s? Housing costs would drop by about 30%, thereby freeing up about 10% of their total expenses. If this 10% was then routed to savings and invested, Americans' financial futures would look far more secure than they do now with a mere 3% saving rate.
It took my wife and I time to learn that we didn't need nor really even desire a large house. We spent the first four years of our marriage in a one bedroom, 1,200 square foot home, which worked perfectly for the two of us. We then moved and spent four years in a 550 square home apartment, where we regularly had gatherings with 15 or more people. But once we left, we planned on having children and thought that meant that we needed a significantly larger home, so we bought a 2,100 square foot home that also had a 400 square foot unfinished basement. After a few years there (God did not bless us with children at that time), we realized that we didn't need all that space, so we downsized to a 1,600 square foot townhouse. That was a better fit for us but still had more space than we needed, and when we moved again, we bought our current home, a 1,200 square foot, three bedroom, two bathroom home, which has worked perfectly for our family of three. We spend less time cleaning and maintaining a smaller home, and the smaller size forces us to spend more time together, which is a good thing! And due to its lower price (and some sacrifice), we were blessed to pay off the mortgage on the home five years after buying it.
There is hope that at least some Americans are warming up to the idea of downsizing. A recent survey found that 56% of respondents said that they would live in tiny home (i.e., a home under 1,000 square feet and usually under 500 square feet) and cited the affordability of tiny homes as their most desirable quality.
Carefully consider where you spend your time in your current home. A study published in the Wall Street Journal found that the families examined spent most of their time in only a small portion of their home, perhaps only regularly using 30% of the space. The rest was seldom, if ever, used. Why, then, do so many believe that they need that unused space? As blogger Steve Adcock has said, it may be due to 'bragging rights' (something a Christian should steer well clear of!), a false belief that entertaining guests requires a lot of space, dedicated space for rare activities, such as a guest bedroom that's only used once or twice a year, or believing that you need "room to grow," a trap that we fell into with our first home purchase.
If you're like your fellow Americans, it's rather likely that your home is significantly larger than you need. Downsizing your home may go a long way to help you in your stewardship of God's blessings.