The New Small House

by Mary Ann Romans | More from this Blogger

24 Oct 2008 08:52 AM

Gone are visions of McMansions and large impressive houses with top of the line amenities. Instead, buyers and builders are looking toward smaller homes with tighter floor plans in an effort to bring home ownership and sales in line with the economy.

Typical new homes during the boom were along the lines of 3,400 square feet and featured expensive amenities such as Tuscan style kitchens with granite countertops and top-of-the-line stainless steal appliances, archive rooms, media rooms, etc. Today, builders of new homes say that they typically switched to putting in 2,400 square foot homes that may be more affordable to first time home buyers.

Declining home prices have made it less profitable to build larger homes. The market is just not supporting the cost, leaving little or no profit left for the builder.

There is another reason, beside price, that smaller homes are becoming more appealing, and that is the cost of running them. Larger homes need more energy to heat, cool and function. They need more manpower to maintain, from landscaping to cleaning, and home owners are feeling the pinch that these larger homes are causing. Larger homes also cost more to furnish. The furniture industry is reflecting this downsizing with fewer profits taking place today.

Now, new homes are shrinking even more, with builders putting in more new homes at around 1,230 square feet. Previous to the boom, about 20 years ago, the median size single family home was about 1600 square feet. Buyers are typically willing to do without all of the fancy amenities in order to be able to afford a home. Few new home owners are opting to upgrade from laminate countertops, for example. Tighter mortgage lending also makes it difficult to get into a larger home.

What do you think of this trend? Will smaller homes become standard for another 20 years, or will the trend reverse soon?

Mary Ann Romans writes about everything related to saving money in the Frugal Blog, creating a home in the Home Blog and caring for little ones in the Baby Blog. You can read more of her articles by clicking here.

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Learn more about Mary Ann Romans

Mary Ann Romans is a freelance writer, wife and mother of three children. She lives in Pennsylvania with her husband, the kids and a 16-pound cat.

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