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Housing Needs to Downsize

They're pricing themselves out of the market with ever-bigger houses.

Since the recession, big homes have become an ever-bigger share of the U.S. housing market. People who already own a house and want to trade up now account for 85 percent of new-home buyers, compared with 70 percent historically, according to the National Association of Home Builders. Such "move-up" houses are not only bigger but typically more profitable for builders. The result is that big houses are now bigger than ever.

But the trend might break builders’ backs.