WASHINGTON – Nov. 21, 2014 – The size of the typical home is shrinking, and analysts think that may be a sign that a wider array of buyers, including first-timers, is returning to the market.

The median size of a single-family home has decreased for the past two consecutive quarters, and will likely continue to go down as more first-time buyers enter the market, according to the National Association of Home Builders (NAHB).

The median size of a single-family home dropped 2.3 percent in the third quarter over the previous quarter, falling from 2,472 square feet to 2,414. That marks the smallest home size since the fourth quarter of 2012.

Home sizes were on the rise coming out of the recession, mostly due to a surge in the luxury market, NAHB notes.

"Typical home size falls prior to and during a recession, as some home buyers cut back, and then sizes rise as high-end home buyers – who face fewer credit constraints – return to the housing market in relatively greater proportions," NAHB notes on its blog, Eye on Housing. "This pattern has been exacerbated in the last two years due to market weakness among first-time home buyers."

But the decline in square footage now indicates that entry-level buyers are on their way back.

The latest drop in median home size "doesn't reflect changes in preferences, necessarily. It reflects who's buying new single-family homes," said Robert Dietz, an economist with NAHB, to The Wall Street Journal.

One example: Building giant D.R. Horton Inc. posted a 38 percent surge in sales orders in the fourth quarter, attributing most of those gains to its new Express brand homes that are priced at $200,000 or less.

"I do know that bigger houses are not as in-demand as smaller houses, unless you're in a community where you've tapped into a niche," said Brian Johnston, COO of Mattamy Homes, a Canadian builder that operates in four U.S. states. "We would definitely be seeing more affordable product as the trend line."

Sources: "Single-Family Home Size Leveling Off as Market Recovers," National Association of Home Builders' Eye on Housing Blog (Nov. 19, 2014) and "Could the Decline in Median New-Home Size Herald Return of Entry-Level Buyers?" The Wall Street Journal (Nov. 19, 2014)

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