Smaller Homes Could Be Making a Comeback
A number of trends suggest that Americans really might be willing to swap their McMansions for McCottages. Soaring fuel costs, environmental concerns and aging baby boomers mean the American dream home may be getting a lot smaller than it used to be.
Over the years, a number of industry professionals have predicted the mass downsizing of the American home. Instead, the average size of newly-built houses has continued to rise from just over 1,600 square feet in the late 1970s to nearly 2,300 square feet now.
But, in a February survey of potential home buyers by NAHB, 60% said they would rather have a smaller house with more amenities than the other way around.
For starters, baby boomers, whose eldest members turned 62 this year, are increasingly becoming empty-nesters. And with the children gone, they need less space.
Families also have changed dramatically. Between 1970 and 2000, the percentage of nuclear families — married couples with children — declined from 40% of households to 24%, according to the Census Bureau. And childless families are expected to increase.
Also, members of Generations X and Y seem more intrigued with life downtown where they can enjoy easy access to restaurants and entertainment, a minimal commute and smaller, easier-to-care-for living spaces.
So how will Americans cope with shrinking space?
Some architects and builders believe that newly-built houses will have layouts that can "live bigger" than their square footage would suggest with rooms that can do double duty. For example, a den can be dressed up as a formal living room when needed.
Formal dining rooms are beginning to fall out of favor as families begin to satisfy their dining and entertaining needs by slightly expanding the breakfast nook.
If the trend toward smaller homes does take root, it could trigger a significant shift in home values.
A study released in May by the online house-pricing service Zillow.com found that less expensive houses appreciated more than costlier top-tier and presumably larger homes over the past five years — 10.1% versus 5.4%, respectively.