Over the past decade, we've seen the average size of newly sold single-family homes in the U.S. shrink from 2,700 to 2,400 square feet, while the price per square foot has jumped by about 72%. By 2025, one in four new homes measured under 1,800 square feet—up from about one in six ten years ago. At the same time, homes with 3,000 square feet or more have become less common, slipping from roughly one in three to one in five. Builders are responding to rising land, labor, and material costs by designing smaller homes, which can help keep purchase prices within reach—especially important as mortgage rates hover around 6% to 7%. For buyers in areas like Encino, Tarzana, and Woodland Hills, this trend means that first-time and budget-conscious buyers may find it a bit easier to enter the market, with lower down payments and monthly costs. However, even with smaller homes, the higher price per square foot shows that finding the right value still requires careful navigation. As someone who has helped buyers and sellers for over 23 years in the Greater Los Angeles area, I know how important it is to weigh all these factors for a successful move.
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