Have Americans Given Up On McMansions?
Kaid Benfield, The Atlantic, 12 February 2012 (hat tip NC)
After many years of dramatically increasing home size in America - from an average of 983 square feet in the 1950s up to 2300 square feet in the 2000s, despite declining household sizes - the trend appears finally to be going in the other direction. The real estate research firm Trulia found in 2010, for example, that the median "ideal home size" for Americans had declined to around 2100 square feet. More than one-third of survey respondents reported that their ideal preference was lower than 2000 square feet.
The biggest factor is the Jumbo loan limit of $417,000. Before the crash we still had a private market in loans. With the Federal Government, through FANNIE and FREDDIE being the end purchaser of most mortgages, it is very hard to get a loan that the won't purchase.
The primary purpose of those homes was to house the boomers, and the teenage echo boomers. As the boomers get older and start to retire, many of them are going to want to cash out on the value of their homes.