According to a new LendingTree report, it seems that larger living spaces are regaining popularity. The average size of new residences in the U.S. increased significantly in 2023, returning to 916 square feet after falling sharply the previous year.
This increase can be linked to more spacious two- and three-bedroom apartments that opened last year, as developers sought to accommodate renters’ need for more space. Notably, the recent upward trend contrasts with the depression that occurred in 2022, when the average size of apartments fell substantially due to a historically large spike in smaller units being constructed.
As peak rental season approaches, LendingTree highlighted cities with the most generous apartments and places with the smallest rentals, as well as areas where apartments have grown in size over the last decade.
Top 10 Cities With Largest Size of New Apartments
- Gainesville, FL (1,173)
- Tallahassee, FL (1,159)
- Baton Rouge, LA (1,068)
- Knoxville, TN (1,057)
- Marietta, GA (1,055)
- Lubbock, Texas (1,037)
- Greensboro, NC (1,035)
- Henderson, NV (1,021)
- Columbia, SC (1,019)
- Louisville, KY (1,017)
Recent Uptick in Apartment Size Contrasts With Decade-Long Shrinking Trend
In 2023, the number of two- and three-bedroom apartments grew relative to the 10-year average. However, looking at what was created last year, one-bedroom flats continued to dominate construction, accounting for the majority of new apartments (48.3%). This was also one of the factors that drove down the average size of apartments over the last decade, a trend that continues despite the recent increase.
Renters who are thinking about becoming homeowners but aren’t quite ready for the financial commitment may like the news that the average size of a single-family home for rent climbed to 1,437 square feet by 2023—some 41 square feet more than the previous year, and second only to the numbers in 2020 (1,457 square feet).
Another feature is that three-bedroom apartments are progressively becoming larger and remain comparable to single-family homes for rent in terms of floor space and rent expenses. A build-to-rent house grew to more than 1,400 square feet in 2023, with an average rent of $2,096, while a three-bedroom unit averaged around 1,350 square feet and $2,160 per month. This is why, in some areas, renters may find it more convenient to rent a house rather than a three-bedroom apartment.
Gainesville and Tallahassee, Florida, led the list of cities with the largest apartments, while Seattle and Portland, Oregon, had the most crowded rentals of the 100 locales we examined. At the same time, an unexpected pattern is emerging from the country’s main urban hubs: The typical size of a rental in major cities like as Washington, D.C., San Francisco, Boston, Los Angeles, Chicago, and even Manhattan, NY, is gradually increasing. In this situation, Chicago and San Francisco saw some of the greatest increases in floor space—an estimated 97 and 73 square feet, respectively.
Over the last decade, the cities in the U.S. with the most spacious apartments have expanded even further. Tucson, AZ, for example, was among the top cities for apartment size, with the average rental increasing by an impressive 246 square feet—enough to accommodate two additional guest bedrooms. Gainesville, FL; Tallahassee, FL; Baton Rouge, LA; Knoxville, TN; and Lubbock, Texas all followed this trend.
Small Rentals are Shrinking, While Large Apartments Gain Square Feet
Two- and three-bedroom apartments have increased in size over the previous decade, while studios and one-bedroom apartments (the most common design among new units) have become increasingly small. Studios and one-bedroom apartments have also been popular among builders in recent years in response to soaring housing demand, to the point where tiny rentals now account for 54.3% of the new apartment market. However, in units completed before 2014, larger rents with several bedrooms accounted for 52.2% of total apartment construction.
In regard to size changes, studios suffered the biggest blow, decreasing by a massive 54 square feet over the last decade: the average size of a studio in 2023 was 445 square feet, down from 499 square feet in 2014. Meanwhile, one-bedroom flats lost a more modest seven square feet of floor space over the last 10 years.
The two-bedroom apartment, the second-most popular design over the last decade, increased by seven square feet to 1,099 square feet last year. Similarly, the even larger three-bedroom apartments had more changes but have steadily gotten bigger: In 2023, the average size will be 1,347 square feet, 19 square feet more than it was a decade earlier. The average size of a three-bedroom apartment was 90 square feet smaller than the average size of a build-to-rent home, yet the monthly rent for that same apartment was $64 higher than for a single-family rental. As a result, renting a house may become more enticing.
To read the full report, including more data, charts, and methodology, click here.
The post Average Size of New Apartments Surged in 2023 first appeared on The MortgagePoint.
