American Homeowners Are Utilizing Space Less Efficiently Than Ever

American homeowners are wasting more space than ever before

The Empty Space Dilemma: Exploring the Record Number of Extra Bedrooms in U.S. Homes

Day by day, the dynamics of the U.S. housing market continue to evolve, presenting challenges and opportunities for both homebuyers and investors alike. Recent data has unveiled an intriguing trend: although the number of homes for sale remains limited, an unprecedented amount of residential space sits empty across the country. As reported by Realtor.com, the phenomenon of “extra bedrooms” has reached historic levels, prompting us to ask—what does this mean for potential homeowners and investors?

A Surging Count of Extra Bedrooms

According to the latest U.S. Census data from 2022, America has recorded a staggering 31.9 million extra bedrooms—defined as bedrooms exceeding the number of residents in a home. This figure marks an increase from 31.3 million in 2021 and highlights a dramatic rise from just 7 million extra bedrooms noted in 1980. As household sizes continue to shrink—from an average of 3.1 people per household in 1970 to just 2.5 in 2023—more homes are equipped with spare rooms than ever before.

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Bigger Homes, Smaller Families

Ralph McLaughlin, a senior economist at Realtor.com, points out two primary reasons for this trend: the increasing size of homes and the decline in household size. The McMansion era, which began in the 1980s, fostered the development of larger homes featuring ample bedrooms and bathrooms. However, in recent years, this trend has plateaued due to rising construction costs, energy efficiency concerns, and shifting consumer preferences towards smaller, more sustainable living spaces.

Interestingly, while the average number of bedrooms per home rose from 2.5 in 1970 to 2.8 in 2023, this number has remained static over the past decade, raising questions about whether the aspiration for larger homes is still prevalent.

Geographic Variations: Where Are the Extra Bedrooms?

What’s particularly compelling is the geographic variance in these extra bedrooms. Data suggest that the Mountain West and Southern U.S. regions boast the highest ratios of excess bedrooms, primarily due to the availability of land that supports larger home designs. In contrast, urban areas face space constraints, leading to smaller properties with limited extra rooms.

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At Extreme Investor Network, we understand that not all markets are created equal. For aspiring investors, the insights surrounding extra bedroom trends can inform strategic decisions. The question remains: Are these extra spaces a reflection of genuine demand or are they a symptom of overbuilding during the McMansion era?

The Top Ten Markets with Extra Space

For those curious about regional differences, here are the top ten markets with the highest share of total bedrooms classified as excess:

  1. Ogden, Utah (12.2%)
  2. Colorado Springs, Colorado (12.1%)
  3. Salt Lake City, Utah (12%)
  4. Memphis, Tennessee (11.8%)
  5. Atlanta, Georgia (11.6%)
  6. Cleveland, Ohio (11.3%)
  7. Wichita, Kansas (11.3%)
  8. Columbia, South Carolina (10.8%)
  9. Charleston, South Carolina (10.7%)
  10. Jackson, Mississippi (10.7%)

In contrast, the markets with the lowest share of excess bedrooms include urban hubs where space is at a premium, such as:

  1. Miami, Florida (5.9%)
  2. Sarasota, Florida (6.4%)
  3. New York, New York (6.5%)
  4. Los Angeles, California (6.6%)
  5. New Haven, Connecticut (6.7%)
  6. Worcester, Massachusetts (6.9%)
  7. Stockton, California (6.9%)
  8. Bakersfield, California (7%)
  9. Honolulu area (7%)
  10. Providence, Rhode Island (7.1%)
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What This Means for Investors

With the real estate landscape shifting underfoot, investors need to stay ahead of the curve. The growing trend of extra bedrooms may represent investment opportunities in markets experiencing population influx and demand for larger homes. Alternatively, investors interested in urban properties should consider the limited extra space in cities, which may lead to a focus on rental availability and pricing.

At Extreme Investor Network, we’re committed to delivering expert insights that empower our audience to navigate the complexities of real estate investment wisely. Understanding the forces behind housing market changes, particularly surrounding excess space, provides a roadmap for making informed decisions that can enhance wealth and stability in an ever-evolving market.

Stay tuned to our blog for the latest in real estate trends and actionable tips on maximizing your investment strategy!