The problem with lifestyle inflation is that it’s hard to see, even when you’re looking for it. The Lifestyle Inflation series gives us the chance to examine items we take for granted as needs and reclassify them. You may not choose to make a drastic change with the information. However, you should at least walk away deliberately happier once you realize you are spending money on a want and not a need.
Today we are looking at home size.
This is a topic near and dear to my heart, as the husband and I are house hunting. I was discussing my house hunting plans with my parents when they asked about our needs list. I explained we were looking for about 1,500 sq ft and 2-3 bedrooms.
That idea lasted about 30 seconds.
I was talked up to a 2,000 sq ft minimum in the space of half an hour, and I left the call convinced we needed not just 3 bedrooms, but also at least one office. It made total sense as I got off the phone. We needed quiet space to get our work done. And our future kids would each need their own rooms just as we enjoyed in our childhoods. I felt a little embarrassed I had considered such a tiny home, and I grimly resolved to find a few hundred thousand dollars more in our budget for the house.
Two days later, I was laying in bed revisiting that conversation. It felt bizarre to me that my expectation was so different than my parents’. How could there be such different views of normal? Which answer was a more accurate reflection of average family reality?
So I turned to my favorite approach in times of need: gathering data.
The Rise of America’s Gigantic Homes
Source: Census Bureau
The chart above is average home square footage data from the US Census Bureau. And if your jaw isn’t on the ground, it should be.
The average new home has increased by 1,000 square feet in just 41 years. That’s really only one generation of homeowners, maybe two. Housing is one of the most expensive line items in any family budget. It has insidiously crept its way up 66% in less than two generations and yet no one is talking about it!
People are buying homes that are 66% larger and thinking they are just satisfying a basic need. In reality, their “basic need” is a luxurious palace compared to their neighbors forty years ago.
This upward drift has huge ramifications for us. The area we are most strongly leaning toward is priced at over $600 per square foot because it is highly urban. An extra 1,000 square feet would require us to come up with an extra $600k.
The surrounding suburbs we are also considering are priced at $300 per square foot. An extra 1,000 square feet would still require us to to shoulder an extra $300k burden.
Are we 66% happier with our homes on average than homeowners 41 years ago? If a home of this size is so necessary, are we implying that it was impossible for the average family to be happy in 1973? What it boils down to for us: Should we spend $300k-$600k more for an updated definition of “normal”, or should we reject it and retain a higher degree of monetary freedom?
My belief is that we should use this information to reset our expectations of normal. It suggests to me that the extra space is unnecessary and we only need to invest some time into understanding how to get the most out of a 1,500 square foot space. Others have done it, and so can we!
Data from the Center on Everyday Lives of Families (University of California, Los Angeles) share clues on how to proceed. The Center followed the home lives of 32 dual-income families hoping to understand how they relate to material goods. As part of their study, they tracked family members’ movement throughout the day in their homes. Below is a heat map from some of their work:
Come on, you had an inkling. The living room and dining room in many houses are giant wastes of space. Eliminating rooms that are rarely used will cut your square footage needs.
You can look for open layouts that may omit these rooms altogether, or look to repurpose that space to better suit your needs. For many (though not all), life now revolves heavily around technology which means many families generally find they need extremely communal/public spaces for gathering (i.e. TV room) and extremely private spaces (i.e. office for computer work), but very little semi-private, semi-cordoned off spaces like a living room.
Of course, some families do do a lot of entertaining. My question to them would be whether they truly need specialized spaces for those occasions, or whether a flexible single dining space for both everyday dining and dinner parties would suit while shrinking overall footprint. The name of the game seems to be eliminating special occasion and single purpose rooms or revamping them to become multi-purpose. My personal rule of thumb will be to see every space in my house used every day in some meaningful way.
My husband and I are ruthlessly pruning our options based on layout. We are keeping our eye out for alcoves to repurpose for an extra office. In New York City, it’s not unheard of to use a large walk-in-closet as an office or a nursery. We may need to get creative, but we are re-committed to the idea of a sub-1,500 square foot space being the real normal we should base our lives around. And if for whatever reason we do upsize later, we will do it knowing full well that others have thrived in smaller spaces and that we are paying for a huge luxury rather than a need.
How about you? What does your home/housing situation look like and are you happy with its size?