BY: Kris Hudson

Newly built homes in the U.S. have steadily gotten larger over the decades, but the South set itself apart in the past 10 years as the region where new homes swelled the most, by far.

Data released by the U.S. Census Bureau this week shows newly built homes in the South, which stretches from Delaware to Texas, increased by 15.3% in median square footage from 2003 to 2013. The growth rate there outpaced those of Census’s other three districts: median new home sizes grew during that span by 9% in the Midwest, 8.9% in the West and 2.2% in the Northeast.

The South’s median home size last year – 2,469 square feet – was larger than those of the other three regions. The equivalent came in at 2,359 square feet in the West, 2,338 in the Northeast and 2,177 in the Midwest.

Nationally, the median size of a newly built home registered 2,384 last year, up 11.6% from 2003, Census data shows.

Home builders, Realtors and economists note several factors that contributed to the South’s leading home-size growth in the past decade. Land prices and labor generally are cheaper in the South than in many other areas, allowing builders to construct larger homes. The South’s relatively hot weather often results in buyers preferring more interior space.

In addition, builders nationally have built larger homes in recent years because more-seasoned buyers can qualify for mortgages while first-time buyers, who tend to buy smaller homes, still are tripped up by stringent mortgage-qualification standards.

Terry Russell, chief executive officer of FrontDoor Communities, a closely held builder based in Atlanta, said home building in the South since 2010 has been dominated by large, publicly traded builders. Those builders tend to try to lower their cost per square foot by constructing larger homes, he said.

“They deliver a lot of square footage in the home for the buyer,” Mr. Russell said. “That’s their value proposition.”

Neal Heery, founding partner of Atlanta Fine Homes Sotheby’s International Realty, said his agency’s buyers, and U.S. buyers in general, tend to buy as much house as they can afford. With interest rates still relatively low at 4.12% for a 30-year, fixed-rate mortgage, buyers can afford to add more upgrades and square footage.

“Does the buyer want a third garage bay? They sure do,” Mr. Heery said. “Do they want a master (bedroom) on the main (floor)? Sure, they do. By the time we get a third garage bay and a master on the main, it’s hard to build a house of less than 4,500 square feet.”

The South hasn’t always reigned as the home of rapidly expanding new homes. In the previous decade, from 1993 to 2003, the West took that distinction with a 17.4% expansion of median home size, Census data show. Census’s West region stretches from Washington state to New Mexico.

Prior to that, from 1983 to 1993, the South had the biggest gain in median home size: 27.8%.

Data for this year’s first quarter, however, show the South taking a bit of a backseat to other regions. In the first quarter, the median size of a newly built home in the South registered 2,463 square feet, trailing those in the Northeast (2,547) and Midwest (2,732). However, monthly and quarterly Census data tends to be volatile and prone to later revisions.

This article originally appeared in the June 3, 2014 online edition of The Wall Street Journal.


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