Do Americans Want Smaller Houses?

Americans are downsizing. Their homes. At least according to this bit of reporting.

"There's a shift going on, and a lot of people are asking, 'What are we going to do with these big houses? What are we going to do as energy prices go higher?"' said Sarah Susanka, an architect and author of The Not So Big House.

Though new homes averaged more than 2,400 feet of living space last year, empty-nesters and young couples are reviving demand for smaller homes such as condominiums, ranchers and Cape Cods.

Builders insist that most buyers still want bigger homes, undeterred by the rising costs to heat and cool them. But they acknowledge that the number of people seeking out smaller living spaces is increasing.

"Smaller" is a relative term, of course. According to the article, in 1970, when the average family was larger, the average new home measured in at 1,500 square feet. The young-ish couple used as the intro to this piece has recently downsized from a 2,400 square-foot house to a 1,700 square-foot house.

So this economy-minded couple is living in a house that is about 13 percent larger than the average house from 30 years ago. Another couple mentioned moved from a 7,000 square-foot mansion into a 2,500-foot house. Not exactly cramped. Especially for a couple. But it is smaller.

Lots of interesting stuff in here about who is moving where and why. Take a look. Are people responding to market forces? Zoning? Convenience? Different people have different opinions, and the article does a good job of laying it all out.

Comments

[Mark Stroup]

Running a press is no picnic, either. As one friend describes it, "one person runs the machine, and the other person turns the machine off if the first person gets caught in it."

[Mark Stroup]

Oops. Wrong entry.

[Jonathan Potts]

There's been talk for a while about eliminating the home mortgage deduction from federal income taxes. I believe there was a tax-reform commission that included that idea amongs its recommendations. Politically, it's probably a non-starter, but it is worth considering. Many economists think the deduction does not help people buy homes who could not otherwise afford them; it merely allows people who already can afford a home buy a bigger one. I discussed this here:

http://jonathanpotts.blogspot.com/2005/11/bringing-down-house.html

[sean mcdaniel]

you know, i think that the reason home owners get a break on mortgage interest deductions is because they bear the burden of paying school taxes, which are based on property.

as for people looking to buy "smaller" homes, i'm not seeing it around here...yet. even so, that 1,700 square feet is still about 400 more than I enjoy now.

[Jonathan Potts]

Those taxes are also deductible. Owning a home is what gives most people enough deductions to exceed the standard deduction, which then allows some--though not all--homeowners to deduct local wage taxes, unreimbursed business expenses, some health care expenses, charitable contributions, etc. As a renter, none of those options were available to me.

The mortgage interest deduction was a way to spur single-family home construction and ownership, pure and simple. The most powerful interests to oppose any tinkering with the deduction are the real estate and construction industries.

[Sam M]

My "flat tax" friends always point to the mortgage deduction as one of the primary political hurdles to eliminating the income tax.

And it does pose serious questions. What do you do with someone who bought a house and calculated the deduction into the family budget. Say they have been living in that house 15 years. Now all of a sudden...

Now multiply that by about 25 million times across the country and you have a real bombshell.

Or do you grandfather those people in. Let them keep taking the deducation and just say "No mas." People like me who do not yet own a house would send up a howl of protest.

Ah, politics.

But just to be clear, I would support rescinding the deduction if it came as part of a larger simplification package. A real one. Even if I got screwed in the process.

Someone has to get screwed, I suppose.