Texas and Charlotte used to build huge McMansions—now they’re copying the California design tricks they once mocked

Just as Gen Z is resurfacing the Tuscan Mom and Mc Mansion aesthetics of the aughts, the harsh reality is that new homes are actually getting smaller and more expensive. The average new home in America is now 2,175 square feet, a 5.6% decline from the peak reached in February 2019, according to a new report from New Home Source shared with Fortune. That’s roughly 125 square feet gone from the typical new home over six years, which amounts to the size of a home office or a spare bedroom. More than 80% of the top 50 housing markets saw average home sizes shrink between 2019 and 2025. Even as homes shrank, prices kept climbing—median single-family home prices rose nearly 48% between 2019 and 2024, according to Harvard’s Joint Center for Housing Studies. “I still hear people talk about the housing market and say, oh, the only thing that’s getting built are McMansions,” Ali Wolf, chief economist at Zonda and NewHomeSource, told Fortune. “The data that you [see] is actually quite the opposite.” It’s the latest sign of housing shrinkflation—getting less for more—a phenomenon that has hit the majority of U.S. housing markets as new-home prices remain elevated. New homes are smaller, yet they’re far more expensive than they were before the pandemic. “Size is the most flexible variable in the homebuying equation right now,” Wolf wrote in the report. “When mortgage rates and prices stay elevated, buyers make trade-offs, and square footage is usually the first to go.” That trade-off cuts both ways, Wolf told Fortune. There’s a wave of entry-level buyers who want to enter the market and are pushing builders to build smaller, cheaper homes. But those are also the same buyers who are having the hardest time breaking into the housing market, as mortgage rates and prices remain elevated relative to the pandemic era. The buyers still closing deals are often wealthier ones who want larger homes and aren’t as fazed by a 5% or 7%