Houses

The cost of homes is preventing young people from the American Dream of home ownership. One way to reduce the cost is to reduce the size of the homes. Just a few years ago it was kind of a joke to say starting castles but there was a lot of truth in that statement. In 1950 the average size of a house was 983 square feet and today it is over 2,300 square feet. In Europe today, the house size is more like the US in 1950 with Germany at 1,001, France at 1,206 and England at 947. The average cost of a house in the US in 1950 using today’s dollars is $95,000 and the average house today cost $512,000. Home cost today in the US range from $100 to $400 per sq ft. That means a home builder today could put up a 1,200 sq ft house for $120,000 which would be affordable for a young first-time buyer. This would mean an interest and principal payment of less than $1,000. Is there a market for new smaller homes?