05/29/2026
The "we super-sized ourselves out of starter homes" argument has a kernel of truth in it.
Minimum square footage requirements, zoning laws, and buyer expectations all pushed new construction upward.
But the 983 square foot homes still exist. They just cost $450,000 now.
That's the part this tweet skips.
The affordability crisis isn't primarily a size problem. It's a supply problem, a zoning problem, a materials cost problem, an interest rate problem, and an institutional investor problem that accumulated over decades while nobody was paying enough attention.
Yes, the average new home built today is over 2,500 square feet. Yes, buyers kept asking for more. Yes, builders kept delivering it because that's where the margin was. All of that is accurate.
But here's what's also accurate.
The 983 square foot Cape Cod that sold for $7,000 in 1950, roughly 2x the median income at the time, is now selling for $400,000 to $600,000 in most markets.
Nobody added vaulted ceilings to it. Nobody put in a walk-in closet. It's the same house. It just costs 5x the median income now instead of 2x.
Minimum lot size requirements in most American suburbs legally prohibit building anything close to a 983 square foot home on a new lot today.
Zoning codes require setbacks, minimum square footages, and parking minimums that make small affordable homes economically impossible to build profitably.
The builders aren't choosing luxury over starter homes out of greed. The regulatory environment makes starter homes financially unviable to construct in most markets.
The tweet is right that expectations expanded. It's wrong that expectations are the cause.
You can want a smaller, more affordable home and still not be able to find one because the system stopped building them and the ones that exist got priced into a different category entirely.
