Bigger is better is back
Americans have always prided themselves on bigger is better; bigger cars, bigger appliances, bigger food servings and bigger homes. For a while big homes weren’t looking as big as they once were, but times are changing and the American homeowners want their big back.
As the economy slowly improves and homeowner’s anxieties ease, buyers are starting to upsize their home purchases again. According to the Census Bureau, the average size of a newly built home was 2,480 square feet in 2011. That was up 3.7 percent from 2010 and represented the first annual increase since 2007.And just for a little reality check, in 1973, the average new home in the United States had 1,660 square feet.
Certainly the improving economy and improving real estate market have a lot to do with the new attitude, but there are also a couple of other reasons. First of all, everyone wants space. Most of today’s first time buyers grew up in large homes and may have been living in small rentals or starter homes and are prime to bust out. Even families who were stuck in homes that were too small, but were afraid to trade up during a weak economy, are now ready to take that leap into a larger home.
There’s also another very logical reason that buyers are interested in buying big. It could very well be that extending just a little for a larger home now is cheaper in the long run. With interest rates still below 4 percent, purchasing the forever house now and spreading the cost over the life the mortgage can be the best financial planning advice around. Selling and moving up to a larger home, which was always the model for first time buyers, doesn’t make as much financial sense when you calculate the cost of moving, the potential for higher mortgage rates down the road and the very likely possibility of appreciating home values.
Another change in the outlook for buyers is the upgrades they’re putting in new and existing homes. Again, with rates as low as they are, adding upgrades to the construction of a new home and rolling the cost into the mortgage adds both value and an improved lifestyle today’s buyers are looking for.
Kitchens upgraded with commercial grade appliances and extra large islands and bathrooms upgraded with jetted tubs and steam showers are good investments in new homes or in an older home you may be thinking about selling. Buyers not only like upgraded homes so they don’t have to live through a renovation, they also like that they can just add the increased value of the home into a very low, interest rate mortgage.
Even baby boomers are having second thoughts about downsizing. Most seniors end up living within 20 miles of their previous home, which ends up keeping their living expenses pretty much the same as when they owned their family home. Moving to resort-like senior communities can actually cost more on a monthly basis than maintaining their home which may have a small mortgage or none at all. Not to mention the life style aspect to downsizing. It can be very difficult living in a small space after getting used to lots of square footage where you and your spouse can have a lot of personal space.
Looks like the giant home has been awakened from it nap and is ready to give America what it really wants – lots of space to prepare those outsize dinners.