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Comment by beisner | Hacker News Reader

This doesn’t necessarily follow - it may be that the average potential buyer wants the same amount of house as before, but due to supply issues the lower end of potential buyers can’t afford to buy anything at all. And size doesn’t scale linearly with price - it’s usually sublinear. So it could be that the only homes that get built/sold are larger because nobody is building homes for middle-lower income price ranges.

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I can't find it at the moment, but in the last year or so there was a really informative "why aren't developers building more affordable housing" article on (I believe) NPR.

There were lots of factors, but basically it comes down to the fact that it's significantly more profitable for builders to build bigger, more expensive houses than smaller, more affordable houses.

AKA, a builder will make much more profit on a single $750K house, than building 3x $250k houses.

So I'm sure the reason houses are getting bigger is some combination of consumers wanting bigger houses, and bigger houses being what's available.

So wants have increasingly overtaken needs. I agree with one 750K house will be more profitable but it won't be that simple because once demand is aggregated selling 50 3x priced homes would quite a bit more difficult then selling 150 1x priced homes. Just an example in my area I see townhomes selling much faster than single family homes. So much that there is premium on town homes.

> significantly more profitable for builders to build bigger, more expensive houses

This is also the reason why car buying also sucks so much now. There is more profit it bigger higher trim cars full of features than smaller reliable basic cars.

Some of this is also fuel economy regulation. You can't make an F150 the size they were in 1992 without onerous fees because of the gas mileage the engine will get (while still being able to meet the needs of anyone who wants a truck, such as towing capacity). The regulations are written so that larger vehicles are permitted to have lower gas mileage. As a result, we see the ever growing trucks and SUV's on the road when people would kill for small trucks that companies just will not make anymore.

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