The American Dream of owning your own home remains. But the home itself appears to have gotten smaller.
As American homes grow larger in size (and higher in price) many people say if they decided to move, they’d want to downsize. More homeowners would rather have a smaller house than a larger one (37 percent compared to 23 percent), according to research from real estate site Trulia.
Here’s how it breaks down: Some 60 percent of people living in large homes of 2,000 square feet and over said they’d rather pick a smaller one next time around; 69 percent of people in the smallest of homes under 800 square feet said they’d like to supersize their accommodations.
Older Americans, more of whom are homeowners, are obviously more likely to want to downsize than millennials. The same percentage of baby boomers (37 percent) said they plan to move at some point in their life, and 42 percent of that number said they would prefer to live in a smaller home, according to a separate study released last December by the Demand Institute, operated by the research groups, The Conference Board and Nielsen.
But there are bigger forces at play, too. “Those living in the biggest of homes know what the downsides are of living in those homes,” said Ralph McLaughlin, chief economist at Trulia. The expenses are large–utilities, taxes, maintenance and furnishing–in those homes and there’s greater potential for something to go wrong and need repairs. In theory, anyway. Older homes are more likely to have problems regardless of the size, like this California couple who moved to a 1929 home that was sinking and had rotten foundations.
Small homes are gaining in popularity, and are showcased in television programs on channels like HGTV. And the number of townhouses being built—often closer to public transport, smaller and less expensive than detached homes—also increased by nearly 13 percent last year to 97,000, according to a National Association of Home Builders analysis of Census Bureau housing starts and completions data released last week.
Marc Demetriou, CLU, ChFC is a branch manager and mortgage consultant at Residential Home Funding Corp. He received an NJBIZ Forty Under 40 Award in 2005 and is ranked as one of the 25 Most Connected Mortgage Professionals in the USA. He is a mortgage and reverse mortgage expert with over 10 years of experience in the mortgage industry.