Florence-area residents considering a new home purchase are likely to encounter a national trend dubbed housing shrinkflation, where new single-family homes are decreasing in size while their prices per square foot continue to climb. This development, highlighted in an analysis of US Census Bureau data released on August 28, 2026, by comparison site LendingTree, shows a significant shift in the housing market over the past decade.
Nationwide, the average size of new single-family homes sold dropped by 11.6% between 2015 and 2025, moving from 2,724 square feet to 2,409 square feet. Despite this reduction in space, the average price per square foot surged by 71.9% during the same period. This trend mirrors the shrinkflation seen in consumer goods, where product sizes decrease while prices remain stable or increase, often due to rising production costs.
The South, which includes the Florence region, experienced the most substantial decline in average new-home size over the last decade, with a 13.4% reduction. This was followed by the Midwest at 12.2% and the West at 9.2%. In 2025, the average new home size in the South was 2,420 square feet. The South also saw a 70.4% increase in the average price per square foot since 2015.
Builders are constructing smaller homes to manage increasing expenses for land, labor, and materials. This strategy aims to keep homes more affordable for buyers facing higher mortgage rates and general affordability challenges. Mortgage rates have been hovering between 6% and 7%, more than double the rates observed during the pandemic, making smaller homes a more budget-friendly option, particularly for first-time buyers.
In 2025, one in four new single-family homes sold nationally measured less than 1,800 square feet, a notable increase from 16% in 2015. Conversely, the proportion of larger homes, those at least 3,000 square feet, decreased from 33% to 20%. Smaller homes also offer the benefit of lower maintenance costs, including reduced expenses for heating, cooling, furnishing, and repairs, which can provide long-term savings for homeowners.
Demographic changes, such as smaller household sizes, are also contributing to this trend. More buyers are prioritizing efficient layouts and practical space over maximizing square footage, leading to increased demand for homes that offer less space without compromising functionality.
The Northeast stands as an exception to this national trend, being the only region where the average new-home size increased by 1.1%. In 2025, the average new home in the Northeast was 2,866 square feet. This is attributed to high land and construction costs in the region, which often lead builders to focus on larger, higher-end properties. However, this increased size comes with a higher cost, as the Northeast experienced the largest jump in average price per square foot, rising 97.2% since 2015.
