Not all new homes are big homes
The classic picture of a big home with a white picket fence and a sprawling yard may be a thing of the past. The American dream of owning a home lives on, but it’s taking on a different face, as many home buyers are increasingly thinking smaller. What’s behind the growing desire for smaller homes?
The Changing Face of the American Dream
Not surprisingly, cost is a major driver of the trend toward smaller homes. Smaller homes mean smaller mortgages, lower development costs and reduced spending on management and upkeep. Smaller spaces also mean smaller costs all around from utilities, taxes, raw materials and maintenance to furnishings and other interior decor.
Cost is especially concerning for millennials, who overwhelmingly suffer from student loan debt. Between towering debt and tighter credit conditions (we can thank the 2008 housing bubble burst for that), many young people are buying smaller homes later.
Smaller Families, Smaller Homes
Today’s young Americans are starting families later and having fewer children. According to Pew Research Center, smaller families have been trending since at least the 1970s. And that doesn’t seem to be changing anytime soon. Instead of a home in the suburbs with enough space for a growing family, this crowd prefers modest-sized one- and two-bedroom homes or townhomes in a more urban setting.
Millennials aren’t the only ones fueling the push for smaller homes. It seems maturing Gen Xers and baby boomers are also after something simpler. Lucas Callejas, a real estate agent with Triplemint in New York, says empty-nesters represent their biggest clientele for downsizing. Callejas says home buyers in this demographic are “leaving the neighborhoods that have the public schools they wanted” and moving to neighborhoods that “fit their needs better,” whether that’s being near the grandkids or closer to the coast.
Mindset Shift from ‘More’ to ‘More Fulfilled’
Aside from the practical reasons behind choosing a smaller home, there’s something bigger at work — the changing mindset of Americans. After almost 50 years of a community standard driven by consumption, the tide is turning away from filling your big home with things and more toward practical, liveable spaces.
While past generations may have been keeping up with the Joneses, today’s home buyers place less importance on possessions and more on personal development. Agent Shelly Place, also with Triplemint, says buyers are reserving more of their money for life experiences like travelling. Millennials and Gen Xers are focused not only on saving money, time and energy, but also on more mindful consumption and reducing their carbon footprint.
The current rash of TV sensations like “Tiny House, Big Living,” “Tiny House Nation” and “Tidying Up with Marie Kondo” are a reflection of minimalism’s growing momentum. Along with it, the market is seeing more pressure for smaller, two-bedroom condos and townhouses. But despite the overall shift in the housing market toward simplicity, practicality and more mindful living, as of 2016, 90 percent of homes on the market still had three or more bedrooms.
It will be interesting to see where the trend of smaller homes, and the housing market, goes from here.
Rebecca Rosenberg is a freelance copywriter, digital media strategist and world traveler. After working in marketing for some of Austin’s most beloved brands, Rebecca started her own business and left Texas behind to travel the world. You can find her currently bumming around Europe. Often flying solo, she has visited over 35 countries and lived abroad in four. In addition to being a digital nomad, Rebecca is an avid hiker, design enthusiast and certified plant nerd. She speaks English, Spanish, German and Korean.