Housing Shrinkflation Is Here to Stay. New Homes Are 11% Smaller but 74% More Expensive Than a Decade Ago

Fortune, Aug. 19, 2025-Sydney Lake
Home buyers are paying more for smaller homes, a phenomenon called shrinkflation. A new LendingTree study found new single-family homes have shrunk 11% in the past decade, while their price per square foot has jumped 74%. Driven by surging land, labor, and material costs (compounded by tariffs and worker shortages), builders are trimming square footage and eliminating wasted space like hallways.
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