Honey, I Shrunk the House

Home builders are slashing costs and square footage


Some houses are so small all you need is a little installment loan to get one

Newly built homes are shrinking. Home builders facing the competition of better-priced foreclosure and distressed properties are reversing their decades-old philosophy that bigger is better. They’re now offering smaller, more basic homes designed specifically for first-time buyers.

Features that were important to buyers during the boom of the 1980s — massive square footage; granite countertops; separate living rooms, family rooms, and home theaters; a bathroom for every bedroom plus a spare — don’t seem to matter right now. Today, home buyers will deign to have the children do their homework in the kitchen rather than the library — if that’s what it takes to save a little extra cash and get a low interest loan.

Weight Watchers for houses?

A drive around many American neighborhoods confirms it: Houses have become morbidly obese. According to the National Association of Home Builders, the average American home swelled from 983 square feet in 1950 to 2,349 square feet in 2004 — a 140% increase in size. And it’s not just the footprints of these Garage Mahals that are huge; everything about them is huge:

Which came first, the Hummer house or the house?

Which came first, the Hummer house or the house?

three- and four-car garages, professional-grade kitchen appliances, and soaring cathedral ceilings.

Is the Hummer house really obsolete?

To be precise, according to the U.S. Census Bureau, the median square footage of newly built homes fell by 7%, down to 2,065 square feet, in the first three months of 2009 compared with the same period in 2008. But does a 7% decrease in square footage really mean that the romance between Americans and their monster homes has finally cooled? Sarah Susanka, author of The Not So Big House thinks so:

A new ethic is arising right now that will become commonplace — as commonplace as is recycling today, when just a few decades ago it was rarely, if ever, done. As more and more people build or remodel homes that satisfy in quality rather than quantity, there will be a huge shift in what we perceive as desirable.

Susanka believes the current shrinking trend echoes the one of a century ago, when simple bungalows supplanted elaborate Victorians.

Will bigger still be better when everything gets better?

The belief that bigger is better is deeply instilled in American culture, and the shrinking footprint of homes geared to first-time buyers could be nothing more than a bow to the current recession. In a recent CNN interview, Kermit Baker, chief economist for the American Institute of Architects, agreed: “Home size gains flatten out or decline during recessions, and we’re in the midst of the most serious housing recession in decades.”

A symbiosis of shrinkage agents

Smart-growth plans

Cities in some parts of the country have instituted growth plans that encourage development in core areas, leaving large patches of green, undeveloped territory farther out. These plans effectively limit development to areas that are already densely populated, drive up the cost of building, and discourage McMansion development.

Building restrictions and moratoriums

Reeling from the sight of towering starter castles cropping up in neighborhoods across the nation, many governments have imposed stricter building limits and have even temporarily halted new construction while they try to get a handle on newcomer settlements of 4,000- to 10,000-square-foot homes.


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The bottom line drives everything, and people will buy as much house as they can afford. With the economy in turmoil, however, home buyers simply cannot spend as much money today as they could just a few years ago.

Energy costs

The rising price of oil has driven up many of the costs of home ownership. Bigger houses cost most to heat and cool, and have more lights and appliances to run. Rising energy prices have also increased the costs of building materials, making bigger homes that much more expensive to construct.


The aging of our population may be playing a part in the smaller-home trend. Whether it’s enough of a factor to make a difference is open to debate, but many aging baby boomers have become empty-nesters and are now downsizing.

Tight credit for big mortgages

Without question, and perhaps thankfully so, the jumbo loans needed to finance big-hair houses have become much more expensive and difficult to find.