Believe it or not, with all the bad news about new housing starts and housing in general, there’s one segment of that market that is doing quite nicely. According to Time Magazine, many people are rethinking their idea of the ideal home and are looking for smaller digs. The small home market is thriving.
Of course this trend may simply be caused by the financial realities of the times. Credit is nearly impossible to get which means the mega loans with 5% down are a thing of the past. Unemployment is still rampant in the country and always in the back of the mind of the employed. Small homes mean smaller mortgages and are now much more attractive to many.
This is particularly true of new couples starting out and older couples who no longer need or want all the extra space now that the children have left. The ones caught in the middle are those couples with kids. Kids don’t stack very well they actually need space.
But there are some real advantages to downsizing. The monthly payment is lower but so will be the cost of heating and cooling. Because it’s a smaller space it will be more adaptable to alternative sources of energy and power. Going green is easier on a small scale than a larger one.
Small homes may mean you have more land to play with to use for self sustaining projects like a vegetable garden or space for alternative energy sources like a windmill. These tough times are really turning back the clock in a sense to your grandparent’s days during the depression. Extravagance just wasn’t an option in those days. You used only what you needed and nothing went to waste. Perhaps that mindset is once again visiting the country.
When the average homeowner spends 34% of their income just to make the mortgage payment, and it’s much higher in some states, small homes become very attractive. One builder of small homes estimates that mortgages for his products will run 10% to 12% of income. That is just a huge difference. Couple that with savings on insurance and utilities and you are talking serious money.
So when it comes to housing maybe size does matter and smaller is better. Certainly something has to give in this housing market. If you can do an honest assessment of your needs (do two people need 2 ½ bathrooms) you may find that the doll house solution might be the right one for you.