Average Apartment Sizes Increase

It’s time for apartment-size ping-pong. Last year, there was a drop. This year, the opposite.

Early in 2023, an analysis of Yardi Matrix data by its RentCafe site found that apartment sizes were shrinking. The average apartment size was 887 square feet in 2022 — a whole 54 square feet less than a decade ago and 30 square feet less than in 2021.

“Notably, last year’s [2022’s] decrease comes after the two pandemic years, 2020 and 2021, when the average size of new apartments actually increased,” they wrote. “Once again, this confirmed the developers’ quick response to the need for more space during the pandemic, as they adjusted floorplans in order to accommodate large enough configurations to fit a home office.”

This year, the opposite happened, according to RentCafe. The average apartment size in the U.S. during 2023 grew by 27 square feet to land at 916 square feet, up from the average size in 2022.

“This increase can be attributed to more spacious two- and three-bedroom apartments opening their doors last year as developers aimed to meet renters’ need for more space,” they wrote. “Notably, the recent upward trend contrasts with the slump registered in 2022, when the average size of apartments fell sharply due to a historically high surge in smaller units being built.”

What might have caused the shifts is the interesting question. In 2022, yes, many people were looking for larger spaces, which creates a bit of confusion if they’re going into new apartment units that are smaller than older ones. There was another large dynamic involving the cost of building. Materials and component prices were skyrocketing. Labor was (and still is) scarce. Even now, with some cooling, final delivery construction for private industry is up roughly 40% over 2019. Property prices were far up. If it costs more to develop a multifamily building, a developer might reduce the square footage of unit construction and put extra space into shared amenities like a clubhouse that might have a lower price because less work is involved.

At the same time, it’s become expensive to buy a home. The monthly spread between homeownership and rentals has reached $824, an 18.4% year-over-year increase in the first quarter of 2024. Mortgage applications for home purchases are at a nearly 14-year low.

Interestingly, it’s not clear that the breakout of apartments by unit type has shifted that much. Over the last 10 years, according to the RentCafe analysis, the split was 5.3% studio, 49.1% one-bedroom, 38.6% two-bedroom, and 7.1% three-bedroom. In 2023, it was 5.2% studio, 48.3% one-bedroom, 39.2% two-bedroom, and 7.3% three-bedroom. That’s not a big difference but look at the three-bedroom units. They were 1,350 square feet while the average build-to-rent house was about 1,400 square feet.

The top ten cities for largest size of new apartments by percentage change are Tucson, AZ (33.1%); Corpus Christi, TX (20.1%); Gainesville, FL (19.7%); Knoxville, TN (18.1%); Baton Rouge, LA (17.6%); Lubbock, TX (17.3%); Tallahassee, FL (15.4%); Little Rock, AR (15.2%); Louisville, KY (15.0%); and Fresno, CA (14.3%).