US Housing Market Hit by Shrinkflation

Shrinkflation is hitting American homebuyers hard, especially in the South, as a recent study found people are now paying more for smaller properties.

An analysis conducted by USA Today/Homefront using data from Realtor.com found that the median American home is now 128 square feet smaller than five years ago, and yet it costs $125,000 more.

Shrinkflation, by definition, is what happens when companies reduce a product's amount or volume per unit without changing its retail price. The concept evokes images of candy bars sneakily getting smaller over the years, or bags of chips and cereal boxes getting emptier, a phenomenon known to outrage consumers.

But the idea can be applied to other sectors as well, including housing. Since 2019, according to the USA TODAY Homefront study, the median U.S. home has become 6 percent smaller, while the price per square foot has surged by a staggering 52 percent.